ITR Filing 2025: Multiple Property Sales In A Year — Does Section 54 Exemption Apply to All?
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Section 54 of the Income Tax Act lets you save tax on long-term capital gains earned from selling a residential house, if you use the profit to buy or build another residential property in India within a specific time frame. Who Can Use This Rule?
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Only individuals or Hindu Undivided Families (HUFs) are allowed to claim this benefit. Companies and partnership firms aren't eligible. Which Properties Qualify?
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You must sell a long-term capital asset (held for over two years) that's a residential house. The new property bought with the proceeds must also be a residential house in India, not a commercial property or land alone. Time Limits for Reinvestment
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If you buy a new house, do so within one year before or two years after the sale of the old property. If you build a new house, you have three years from the sale date to finish construction. How Many Houses Can You Buy With Exemption?
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Usually, you can claim exemption by investing the gains into one new residential property. From Assessment Year 2020-21, there's a special option: if your total gains are up to Rs 2 crore, you can buy two houses—but only once in your lifetime. Can You Claim Exemption For Multiple Sales in a Year?
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If you sell more than one house in a year, you can get Section 54 exemption for each, as long as all conditions are met separately for each sale and reinvestment. However, the two-house option is strictly limited to a one-time use for gains up to Rs 2 crore. New Limits for High-Value Gains
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From Assessment Year 2024-25, the total exemption is capped at Rs 10 crore. If your capital gains or cost of your new house go above this, the excess will be taxed; only up to Rs 10 crore qualifies for exemption. What If You Cannot Invest Right Away?
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If you can't reinvest the gains before your income tax return due date, deposit the money in a Capital Gains Account Scheme. Use these funds for your property purchase/construction later and still qualify for exemption. Important Record-Keeping
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Keep detailed records for every transaction—whether you buy ready property, under-construction flats, or redevelopment units. Proper documentation and intent are crucial for the claims process. Take Expert Help
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Real estate and tax rules can be complex and change often. Get professional advice to make sure you follow every Section 54 requirement and avoid losing your tax benefit due to small mistakes.
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