Dear Sir,Section 54 of IT Axct 1961 says:
Following conditions should be
satisfied to claim the
benefit of section 54.
The benefit of section 54 is availa
ble only to an individual or HUF.
The asset transferred should
be a long-term capital asse
t, being a re
Within a period of one year before or two
years after the date
of transfer of old
house, the taxpayer should acquire anothe
r residential house or
should construct a
residential house within a pe
riod of three years from the da
te of transfer of the old
house. In case of compulsory acquisition
the period of acquisition or construction
will be determined from the date of receipt of compensation (whether original or
So as per conditions of the above section 54 the long term capital gain must be made by you only by sellibng your old residential house proprty. Within 3 years of selling your old house property you hould invest the entire capital gain income in buyinfg or constructing a new house. and that too in sellers name. ?That means in your name and not in your son's or daughter's name., The long term capital gains tax exemption will be available only if you buy only one house property.If your long g term capital gain made through fransfer of old house exceeds the cost of new house then exemptiom will vbe available proportionately as per the following formula. =cost o fthe newshouse * remaining sale proceeds of the old house. or by investing in Section 50 EC of IT Act for 6 months or capital gains scheme of all scheduled commercial bankj. The entire capital gain made through selling o .. This way you can save your long term capitql gain tax total or partial exemptiomn as explained by me above. old house if you can't immediately invest in buying or constructing a new house you can save it by investing in capaital gain scheme of Sxceduled commercial Banks or PS banks. till you buy a new house. If you appreciate this answer and wish to thank me please click the thank you button onthis forum..