Capital gain exemption

read sec 54 of the Income Tax Act  act  1961

sir,

sec. 54 applies in case of a "Profit on sale of a property used for residence". i am talking about commercial property.

If you dont use that commercial property for your business or profession than it is treated as a residential house only.

It does not matter for which purpose the property is let out. So if you were not using that property for your business than section 54 is available to you.

Otherwise you can invest in the bonds as specified in section 54EC subject to maximum of 50 lacs

Capital gain is calculated on capital Assets. Therfore, it doest not matter whether the same was used for commercial purpose or for residencial purpose. Therefore, in both cases, sale of capital asset would give rise to capital gain and would be taxed accordingly. However, exemption is prescribed in Sec-54 of the IT Act to save capital gain tax.   Sec- 54 EC is available for investing capital gain, arising from sale of long term capital asset.