# Section 54 Exemption Estimator

> Section 54 exempts long-term gains from selling a house if you buy another house within one year before or two years after the sale, or construct one within three years. Section 54F gives the same relief for gains on other assets (land, shares, gold) if the whole net sale proceeds are invested in a house. Section 54EC exempts gains on land or buildings invested in specified bonds within six months, up to ₹50 lakh.

Interactive calculator: https://www.industax.com/calculators/section-54-exemption

- **Buy new house within:** 1 yr before / 2 yrs after
- **Exemption cap (54/54F):** ₹10 crore
- **54EC bonds limit:** ₹50 lakh in 6 months

## The three main exemptions

|  | Section 54 | Section 54F | Section 54EC |
| --- | --- | --- | --- |
| Asset sold | Residential house (long-term) | Any long-term asset other than a house | Land or building (long-term) |
| Invest in | Residential house in India | Residential house in India | NHAI, REC, PFC, IRFC or notified bonds |
| Amount to invest | Capital gain | Net sale consideration (proportionate otherwise) | Capital gain, max ₹50 lakh |
| Time limit | Buy 1 yr before/2 yrs after; build in 3 yrs | Same as 54 | Within 6 months |
| Cap | ₹10 crore | ₹10 crore | ₹50 lakh per year |
| Lock-in | 3 years | 3 years | 5 years |

## Capital Gains Account Scheme

If you haven't bought or built the new house by the ITR due date, deposit the unutilised amount in a Capital Gains Account Scheme account with a bank before that date. The exemption is then provisional until it is used within the time limit; unused amounts become taxable when the period ends.

## Conditions people miss

- 54F: you must not own more than one house (other than the new one) on the sale date
- 54: two houses allowed once in a lifetime if the gain is ≤ ₹2 crore
- The new house must be in India
- Selling the new house within 3 years reverses the exemption

## Worked example: selling a flat and buying a bigger one

1. Long-term gain on the old flat: ₹60 lakh.
2. New flat bought 8 months later for ₹1.2 crore — more than the gain.
3. Section 54 exemption = ₹60 lakh (the full gain).

**Result:** Capital gains tax: nil, provided the new flat is held for 3 years.

## FAQs

### Can I claim both Section 54 and 54EC?

Yes. You can invest part of the gain in a new house and part in 54EC bonds, as long as each meets its own conditions and limits.

### Can I buy the new house in my spouse's name?

Courts have often allowed it where funds came from the seller, but the safer course is to buy in your own name or jointly.

### Does buying an under-construction flat count?

Yes — it is treated as construction, which must be completed within three years of the sale.

## Official sources

- incometaxindia.gov.in: https://www.incometaxindia.gov.in/

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Canonical page: https://www.industax.com/calculators/section-54-exemption
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.