K Soman 22 March 2026

Can capital gain saved with the property under construction since last 4 years

Respected Sir,

I am selling property in next month that is April -2026. I have to pay the capital gain tax on the amount as a seller/owner of the property. I read that if I purchase a property that is under construction then for next 3 years there is no need to pay capital gain tax.

I already purchased property in the year of MArch -2022 and for that property construction is not yet completed. The agreement is done in March-2022 itself. It will get completed in next 1 year as builder is delaying the construction. There is no completion certificate available.

My query is, under this situation, can I save capital gain tax for this property because it is purchased 4 years back and still under construction only.

The cost of the property selling price in 2026 is same as I purchased property previously in year of 2022.

Kindly suggest.

Thank you

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2 Replies

Dr. MPS RAMANI Ph.D.[Tech.] (Scientist/Engineer) 23 March 2026

Yes you can claim capital gains tax exemption if you pay the amount for the property under construction. But if you are selling the property at the purchase price there will be no capital gain and no capital gains tax. In fact if you make a capital loss, you can adjust the loss against any capital gain that you may make, say, in the share market.

You purchased the property in 2022. If you sell the property in 2026 the indexed cost of the property in 2026 will be used to compute Capital Gain/Loss. So you may technically make a capital loss even if actually make no gain or loss or even a small gain or a small loss.

T. Kalaiselvan, Advocate (Advocate) 26 March 2026

Under Section 54 (or 54F) you must Buy a house within 1 year before / 2 years after sale or construct within 3 years from date of sale, for under-construction property, law treats it as “construction”.The 3-year period is counted from the DATE OF SALE (2026) and not from your earlier purchase in 2022. So your sale is April 2026 hence eligible construction window is till April 2029.

Even for under-construction property it must be completed within 3 years from date of sale or at least investment must be made within that window. The construction is already ongoing since 2022 (4+ years) and the completion is expected after 2026. Therefore there is no necessity for fresh investment requirement post-sale.