# Section 54, 54F & 54EC Capital Gains Exemptions

> Section 54 exempts long-term gain from selling a residential house if it is invested in another house — bought one year before or two years after the sale, or constructed within three years. Section 54F gives the same relief when any other long-term asset is sold, if the whole net sale proceeds go into a house. For both, the new house's cost counts only up to ₹10 crore. Section 54EC exempts up to ₹50 lakh of land or building gains invested in specified bonds within six months.

Practice: Property & Capital Gains Tax — https://www.industax.com/services/property-tax/

If the new house isn't bought before your ITR due date, the unused amount must be deposited in the Capital Gains Account Scheme to keep the exemption. Selling the new house within three years reverses it.

Once in a lifetime, a taxpayer whose gain doesn't exceed ₹2 crore can use Section 54 to buy two houses instead of one. Exemptions can be combined — part in a house, part in 54EC bonds — and we optimise the split for your cash needs.

## Key facts

| Item | Detail |
| --- | --- |
| Section 54 | House → house; 1 year before / 2 years after (3 years to construct) |
| Section 54F | Other asset → house; invest net sale consideration |
| Cost cap | New house cost counted up to ₹10 crore (54 and 54F) |
| Section 54EC | Up to ₹50 lakh in specified bonds within 6 months; 5-year lock-in |
| CGAS | Deposit unused amount before ITR due date |

## Who needs this

- Sellers of houses, land, shares or other long-term assets
- Buyers planning a new home with sale proceeds
- Sellers who missed the purchase before the ITR due date

## What's included

- Exemption options compared
- CGAS deposit guidance
- Bond investment timing
- ITR reporting and lock-in tracking

## Documents

- Sale deed and gain computation
- New property agreement / construction records
- CGAS or bond certificates

## Process

1. **Model** — Tax under each exemption mix modelled.
2. **Invest** — Purchase, CGAS deposit or bonds timed correctly.
3. **Report** — Claimed in the ITR; lock-ins tracked.

## Also covers

- **Section 54** — House sale reinvested in a house.
- **Section 54F** — Other assets reinvested in a house.
- **Section 54EC** — Specified bonds up to ₹50 lakh.

## FAQs

### What if I can't buy the new house before filing my ITR?

Deposit the unutilised amount in the Capital Gains Account Scheme before the return due date and use it within the time limits.

### Can I claim Section 54 for two houses?

Once in a lifetime, if the capital gain doesn't exceed ₹2 crore.

### Is there a limit on Section 54 exemption?

Yes, the cost of the new house is counted only up to ₹10 crore when computing the exemption.

## Official sources

- Income Tax Department — capital gains exemptions: https://www.incometaxindia.gov.in/

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This is general information, not advice for your specific facts.