BooksIQLONG-TERM capital gain on sale of ANY asset OTHER than a residential house is exempt if the NET CONSIDERATION is reinvested in one residential house (1 yr before / 2 yr after purchase, 3 yr construction). Proportionate if only part is invested; ₹10 crore cap. Assessee must not own more than one other house.
Key points
- §54F exempts LONG-TERM CAPITAL GAIN of an individual / HUF on transfer of ANY long-term asset OTHER than a residential house, if the NET SALE CONSIDERATION (not just the gain) is invested in ONE residential house in India within the §54 timelines (purchase 1 year before / 2 years after;
- construction 3 years).
- If the WHOLE net consideration is invested the entire gain is exempt;
- if only part, the exemption is PROPORTIONATE (gain × amount invested ÷ net consideration).
- The maximum investment eligible is ₹10 CRORE (AY 2024-25+).
- CONDITIONS: the assessee should NOT own more than ONE residential house (other than the new one) on the date of transfer, and should not purchase/construct another house within the specified period.
- Unutilised amount → Capital Gains Account Scheme before the ITR due date.
Reference: §54F ITA 1961 — under ITA 2025 (FY 26-27 onwards), this is §86
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