Section 54F: Claim Capital Gains Tax Exemption on Property? Know How It Works

• Section 54F allows individuals and HUFs to claim tax exemption on long-term capital gains from selling assets (other than residential property) by reinvesting in a residential house.
• The exemption applies if net sale consideration is invested in purchasing or constructing a residential property in India within specified time limits.
• For ready-to-move-in property, purchase must be within two years; for under-construction or new construction, completion must be within three years from asset sale date.
• Taxpayers can claim exemption across multiple years for staggered payments on an under-construction home, provided investment conditions are met and construction is completed within three years.
• Crucially, the taxpayer must not own more than one residential house on the date of sale of the capital asset, excluding the new property.