Exemption of Capital Gain u/s 54

A person purchase a new flat before one year of selling his old flat, new flat is under construction, possession will given after five years by the builder. He will paying installments as per agreement with the builder.is he eligible for exemption of capital gain tax under section 54 of income tax act.
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Quick Summary
This discussion explores eligibility for capital gains tax exemption under Section 54 when purchasing an under-construction flat. The key conditions involve purchasing or constructing a new residential property within specific timeframes relative to the sale of the old property. While the general rule allows purchase one year before or two years after the sale, constructing a house has a three-year window from the sale date.

The seller should purchase a residential house either 1 year before the date of sale/transfer or 2 years after the date of sale/transfer. In case the seller is constructing a house, the seller has an extended time, ie. the seller will have to construct the residential house within 3 years from the date of sale/transfer. In case of compulsory acquisition, the period of acquisition or construction will be determined from the date of receipt of compensation (whether original or additional compensation)

Agree  with  Sourav  , one of the condition  under section 54  is ,  Your  New  residential  Flat  Should be  Constructed  with  in  Three years  from the date of Transfer  (sale )   and  second  condition   is   you can not  sale  new Flat  within   three  years  .

Old flat capital gain will be taxable and no relief under section 54.
Nowadays construction flat in big gated community is taking 4 to 5 years . For the purpose of exception capital gains selling a residential property & getting allotment letter for buying a new flat in the same year or within one satisfy the condition .

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