Section 54F - Exemption on LTCG in 2026 for HP purchased in 2023

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This query is : Resolved

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Section 54F exemption may be available for an under-construction house bought under a construction-linked plan. Only payments made after the LTCG arises are generally eligible. Key factors include possession date, registration date, and whether any earlier Section 54F claim was made.

Piyush

Piyush (Querist)

24 June 2026 House property was purchased (registered) in August 2023, as property is still under construction and the payment of the property is based on Construction Linked Plan of the Project. Installment for June 2026 was paidfrom proceeds from sale of Mutual Funds.

If Long Term Mutual Funds are sold in June 26, Can an assessee Claim Exemption U/s 54F against purchase of House property in August 2023?

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

24 June 2026 Can you claim Section 54F? Yes. Because booking a flat under a Construction-Linked Plan is legally viewed as "construction," you have 3 years from the date of the mutual fund sale (i.e., until June 2029) to complete it.

Exemption Limit: The exemption will be available proportionately for the installments paid after the sale of the mutual funds in June 2026 (including the June 2026 installment itself). Payments made prior to June 2026 cannot be claimed under the construction clause of Section 54F. Ensure remaining unutilized proceeds are parked in a Capital Gains Account Scheme (CGAS) before filing your ITR to secure the exemption.

Piyush

Piyush (Querist)

24 June 2026 Thank you Sir for your reply.

but in above case, House property is alredy registered in Aug 2023. If we want to claim exemption under sec 54F for Capital Gain on Mutual Funds, what should be the date purchase of House property?
Next installment towards purchase will be in July 2026