Section 54 lets you reduce LTCG tax if you reinvest
Section 54 applies to residential house sale and residential reinvestment. Section 54F applies when another long-term asset is sold and net consideration is invested in a residential house.
Situations this page is built for
- Sold flat and planning to buy a new one.
- New house construction will take 2-3 years.
- Reinvestment deadline approaching and CGAS deposit needed.
- Sold plot or commercial property and buying residential house.
- ITR filed without claiming exemption and revision is needed.
Key conditions and timelines
- Purchase new property 1 year before or 2 years after sale.
- Construct within 3 years of sale.
- Deposit in Capital Gains Account Scheme before ITR due date if reinvestment is incomplete.
- Review one-house restrictions and amendments for the relevant year.
- New property sale within 3 years can reverse benefit.
Documents required
- Original property sale deed.
- New property purchase or construction agreement.
- CGAS deposit slip/certificate, if applicable.
- Original property cost and purchase date.
- Home loan documents for new property, if any.
Process
Calculate LTCG
Compute indexed gain where applicable.
Check eligibility
Match asset, reinvestment and ownership conditions.
Open CGAS if needed
Deposit unutilised amount before due date.
Claim in ITR
Report exemption in Schedule CG.
Maintain for 3 years
Avoid premature sale that reverses benefit.
Section 54 Capital Gains Exemption: year and source check
Last fact-checked: 25 May 2026.
AY 2026-27 means FY 2025-26 income under the Income-tax Act, 1961. Tax Year 2026-27 means FY 2026-27 income under the Income Tax Act, 2025. Do not mix the two labels.
Use official portal pages, CBDT notifications, the supplied Act PDF and ICAI material before making a filing, payroll, TDS/TCS or rebate decision.
FAQs
Which year should I use for Section 54 Capital Gains Exemption?
Use AY 2026-27 for FY 2025-26 income under the Income-tax Act, 1961. Use Tax Year 2026-27 for FY 2026-27 income under the Income Tax Act, 2025.
What documents should I share with a tax expert?
Share the portal screenshot, exact year, income breakup, certificates, AIS/Form 26AS, notices, challans and any computation already prepared.
Can WorkIndex help me find a specialist?
Yes. Post a requirement with the legal year, records and deadline so experts can quote on the real issue instead of a generic page title.
Section 54 Capital Gains Exemption: year and source check
Last fact-checked: 25 May 2026.
AY 2026-27 means FY 2025-26 income under the Income-tax Act, 1961. Tax Year 2026-27 means FY 2026-27 income under the Income Tax Act, 2025. Do not mix the two labels.
Use official portal pages, CBDT notifications, the supplied Act PDF and ICAI material before making a filing, payroll, TDS/TCS or rebate decision.
What to verify for Section 54 Capital Gains Exemption
- Correct financial year, assessment year or tax year.
- Taxpayer type, age category, residential status and business/profession status.
- Exact income heads, including salary, house property, business/profession, capital gains, VDA and other sources.
- AIS/TIS, Form 26AS, TDS/TCS certificates, challans and portal pre-fill.
- Deductions/exemptions allowed in the selected regime and current ITR utility validation rules.
- Whether the issue is a calculation, filing, notice response, rectification, appeal or advisory position.
Section 54 Capital Gains Exemption: year and source check
Last fact-checked: 25 May 2026.
AY 2026-27 means FY 2025-26 income under the Income-tax Act, 1961. Tax Year 2026-27 means FY 2026-27 income under the Income Tax Act, 2025. Do not mix the two labels.
Use official portal pages, CBDT notifications, the supplied Act PDF and ICAI material before making a filing, payroll, TDS/TCS or rebate decision.
What to verify for Section 54 Capital Gains Exemption
- Correct financial year, assessment year or tax year.
- Taxpayer type, age category, residential status and business/profession status.
- Exact income heads, including salary, house property, business/profession, capital gains, VDA and other sources.
- AIS/TIS, Form 26AS, TDS/TCS certificates, challans and portal pre-fill.
- Deductions/exemptions allowed in the selected regime and current ITR utility validation rules.
- Whether the issue is a calculation, filing, notice response, rectification, appeal or advisory position.