Long term capital gain tax

1].  The Capital Gains arising can either be invested by buying a new house within 2 years from the date fo sale or if the property is udner constructino within 3 years from the date of sale and exemption can be claimed u/s 54.  Else the CG may ivnested by purchasing the bonds issued by NHAI or REC within a period of 6months from the date of sale.

2]. As the sale of plot is made and not the property so the exemptino u/s 54F cna be taken by investing the Net sale proceeds and not the Capital Gains in a property or in bonds same as explained in 2 above

Dear Giridhar,

Thanks for your prompt reply.

Can Mr.X still claim expemtions u/s 54F even though he has third residential house ( property 3) in his name in which he continues to live. ? Can exemption u/s 54F be claimed only when the seller does not have any other residential house in his name. Please clarify.

Tx-

S Nagar

Mr Nagar exemption u/s 54F can be taken only if the seller owns not more than one house at time of sale of the asset.  The detailed provisions are as below:

Provided that nothing contained in this sub-section shall apply where—

(a)  the assessee,—

  (i)  owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or

 (ii)  purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or

(iii)  constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; and

(b)  the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head "Income from house property".]