|Section 54||Section 54F|
|To claim full exemption the entire capital gains have to be invested.||To claim full exemption the entire sale receipts have to be invested.|
|In case entire capital gains are not invested – the amount not invested is charged to tax as long-term capital gains.||In case entire sale receipts are not invested, the exemption is allowed proportionately.
[Exemption = Cost the new house x Capital Gains/Sale Receipts]
|You should not own more than one residential house at the time of sale of the original asset.|
|This exemption will be reversed if you sell this new property within 3 years of purchase and capital gains from sale of the new property will be taxed as short-term capital gains.||This exemption will be reversed if you sell this new property within 3 years of its purchase or construction OR if you purchase another residential house within 2 years of the sale of the original asset or construct a residential house other than the new house within 3 years of sale of the original asset. Capital gains from the sale will be taxed as long-term capital gains.|
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