Capital gains exemption - section 54

Long Term Capital Gain from the Transfer of Residential House Property (Section 54)
iv) The transferor assessee should purchase a residential house in India within a period of one year before or two years from the date of transfer or construct a residential house within three years from the date of the transfer of the original house. (Construction must be completed within these 3 years.), and

Amount of Exemption. The amount of exemption under section 54 is

• Equal to the amount of the capital gain if cost of new house property is more than the capital gain, or
• Equal to the cost of the new house property if the cost is less than the capital gain.

Deposit Scheme under Section 54. Where the amount of capital gain is not so utilized for the purchase or construction of a new residential house before the due date of furnishing of the return of income, it shall be deposited by him on or before the due date in an account with a public sector bank in accordance with the Capital Gain Account Scheme, 1988. The amount already utilized on the new house together with the amount deposited shall be deemed to be the amount utilized for the purchase of new house under section 54. If the amount deposited is not utilised for the purpose of purchase or construction of new house within the stipulated period, then the amount not so utilised will be treated as long term capital gain of the previous year in which the period of three years expires. In such case the assessee is entitled to withdraw the amount from the bank.



Long Term Capital Gain Exemption for Investment in Certain Bonds (Section 54EC)
This exemption is is available an individual, HUF, company or any other person who invests the long term capital gain, within 6 months of a the transfer of the capital asset, in any of the specified bond (issued on or after April 1, 2006) redeemable after 3 years:

• National Highway Authority of India (NHAI), or
• Rural Electrification Corporation Ltd. (REC)

There is a limit of Rs. 50 lakh on the investments on or after April 1, 2007.

The face value of a bond is generally Rs. 10,000 and the rate of return correctly averages about 5.5 to 5.75 per cent. This return is taxable income.

this point is more clear your doubt

I am not sure if your reply answers my question.

My question is can I sell two properties and claim LTCG tax by buying two more properties

Thanks,

Murugan