Reinvesting ltcg from two properties in one?

sujatha 1
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Dear Sir,

We are planning to sell one residential property and one or two plots of land to buy land and construct one residential property ie., reinvest two sale proceeds into one plot of land and build 3 or 4 apartments there.

Can we claim deduction for both(or 3) sale by reinvesting in one property?

Sujatha

section-54f residential-property long-term-gains section-54 income-tax
1 Answers

You can claim deduction for more than one sale against a new residential property construction u/s 54 and 54F.

In order to save tax fully, cost of construction of new property should be more than sum of all sale considerations for non-residential house assets and capital gains of house residential properties.

However there are below conditions for section 54F applicability here:

  1. Construction of new property must be finished within three years from sale of old properties.
  2. You should not be owning more than two residential house(flat/house/apartment) at the time of selling old plots.
  3. If total residential houses owned by you becomes two (including new constructed property), you should not buy another one within next three years of purchase. Or in next three years, total owned residential houses should not be more than two.
  4. New property should not be sold before next three years.
Pankaj Batra5212
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