You can claim tax deduction u/s 54 when you have purchased a property from the proceeds of the house property you sold.
The exemption amount allowed u/s 54 will be lower of
- the amount invested in the new residential house property
- or the capital gains
This exemption u/s 54 is available when:
- A Long Term residential House Property is sold
- A new residential house is purchased
- Before one year
- Or after two years from the sale of the residential House Property
- Or 3 years from the sale of residential House Property, when it is constructed
- The new residential House Property is not sold before 3 years from the date of purchase
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