When is tax exemption available on Sale of House Property u/s 54?

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