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G1-G9 filing ASP/GSP solution
Elevate processes with AI automation and vendor delight
Streamline vendor management and collaboration in one unified portal
Optimise ITC for profitability
Bulk invoicing within any ERP
e-TDS return filing solution
Maximise EBITDA with early vendor payments
Instant working capital financing
Automated secretarial compliance
Connected finance ecosystem for process automation, greater control, higher savings and productivity
GST and direct tax compliance
Complete supply chain solution for ultimate control, effortless collaboration, and assured compliance
File ITR in 3 minutes
For Personal Tax and business compliances
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Updated on: Feb 24th, 2025
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2 min read
Income Tax allows exemption on the long term capital gain if you invest the gains/consideration in a new residential property subject to certain conditions. Recently, the Income Tax Appellate Tribunal (ITAT) Delhi has allowed multiple-year exemption u/s 54F for an under-construction house. It held that taxpayer can invest capital gains for the second or third time also towards the same new house property.
Section 54F of the IT Act allows an exemption on capital gain from the sale of any property other than a residential house. This exemption is subject to certain conditions, which are:
Budget 2023 update: The maximum deduction u/s 54F is capped at Rs.10 crore. However, this shall be effective from 1st April 2024.
There is no bar in Section 54F for claiming deduction for second or third time also for the same property if the cost of the property is less than Rs.10 Crores and is within the capital gain arising to the taxpayer. In the above case, the total capital arising to the taxpayer in all three years 2008-09 to 2010-11 was less than Rs.10 Crores as well as the cost of construction of the residential property at Mehandi Farms, New Delhi.
Details of Case Law
ACIT New Delhi v Mahinder Kumar Jain IT APPEAL NO. 5254 (DELHI) OF 2014.
Also Read
Section 54 of Income Tax Act
Capital Gains Exemption
Section 54F
Capital Gains Tax
Long-term capital gains
Short-term capital gain
Tax on Long-term Capital Gains on Equity Funds
Short Term Capital Gain on Shares
A taxpayer who sells multiple assets and invests all proceeds into one house can claim an exemption under section 54F (refer ACIT v Mahindra Kumar Jain).
A taxpayer can claim capital gains exemption under section 54F upon the sale of any long term capital asset other than a residential house.
An individual or HUF can claim a capital gains exemption under section 54F of the Income Tax Act by investing in residential house property.
You can claim exemption by depositing in capital gains accounts scheme before the due date for filing the income tax return.
In order to claim exemption under Section 54F, new residential house property must be purchased within 1 year before or 2 years after the date of transfer or constructed within 3 years from the date of transfer.
I'm a chartered accountant, well-versed in the ins and outs of income tax, GST, and keeping the books balanced. Numbers are my thing, I can sift through financial statements and tax codes with the best of them. But there's another side to me – a side that thrives on words, not figures. Read more
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