Full Exemption on Capital gain

Tax queries 289 views 5 replies

Tanvi Sharma

Accountant

21 Points Joined July 2025

In case of individual, for residential house sold after 23rd July 2024, whether capital gain calculated with indexed cost of acquisition can be invested in residential house to claim exemption u/s 54?

For example, a property is sold for Rs. 1 crore in October 2024.

Its Cost of Acquisition is 25 lacs.

Indexed Cost of Acquisition is 70 Lacs.

The seller can invest Rs. 30 lacs (100-70) to claim full exemption on tax?

or is he required to invest full 75 lacs(100-25) to claim full exemption on tax?

Replies (5)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

198386 Points Joined July 2016

Yes, investment of LTCG calculated based on indexed cost of acquisition is allowed u/s. 54 IT act.

sabyasachi mukherjee

27936 Points Joined May 2017

Sec 54F full exemption on capital gain.

Invest in hiuse property within a period of 2 years from the capital gain has arisen.

SHIRISH S S

Proprietor

1080 Points Joined May 2017

30 lakhs has to be invested for full exemption. Power finance corp capital gains bond for eg

SELVAKUMAR

28 Points Joined July 2021

Is indexation benefit available to a Resident India on sale of foreign real estate ( House property) for LTCG?

Cs26kit

Mr.

186 Points Joined May 2021

Originally posted by : sabyasachi mukherjee
	Sec 54F full exemption on capital gain. Invest in hiuse property within a period of 2 years from the capital gain has arisen.

Always mention the caveats. The condition here, as far as I know, is that if you are unable to invest your LTCG before the income tax filing date for the FY in which you realized the gain then you have to put that LTCG in a CGAS account at an authorized bank. (Opening/closing a CGAS account might be another headache.)

E.g. If you realize your LTCG in July 2024, then you have till July 2026 to invest it in a Resi. House but if you are unable to invest it before your ITR filing for AY 2025-26 then you have to put it in a CGAS a/c. You can then utilize it till July 2026 tax free for a Resi house purpose. After July 2026 it will be fully taxable.