vinujaglan.com · Founder's official site 
How to read section numbers: s.80C→s.123 means Section 80C of the Income-tax Act, 1961 is now Section 123 of the Income-tax Act, 2025 (in force from 1 April 2026). Returns for FY 2025-26 still use the old numbers; Tax Year 2026-27 onwards uses the new ones. Section Finder
Proportionate exemption
Exemption = capital gain × (amount invested ÷ net sale consideration). Invest the whole consideration and the whole gain is exempt; invest half and half the gain is exempt. Investment above ₹10 crore is ignored.
Conditions
- On the date of sale you must not own more than one residential house (other than the new one)
- Do not buy another house within 2 years or build one within 3 years
- Unspent amount goes to the Capital Gains Account Scheme before the ITR due date
- Sell the new house within 3 years and the exemption is reversed
Worked example
Example
Example: Shares sold for ₹60 lakh with LTCG ₹20 lakh. ₹45 lakh invested in a house: exemption = ₹20 lakh × 45/60 = ₹15 lakh; ₹5 lakh taxable.
Common mistakes
- Investing only the gain (54F needs the whole consideration)
- Owning two houses already on the sale date
Frequently asked questions
No — a residential house falls under section 54 (section 82 of the 2025 Act).
Last reviewed on 11 November 2026 by Vinay Jaglan, VJ & Associates. Law and portal screens change — verify before acting, or ask the office.
