SEC 54 OF INCOME TAX ACT 1961

• Tax saving on sale of Residential house property under Section 54 of Income Tax Act, 1961.Interim Budget 2019 has proposed rollover of capital gains under Section 54 of the Income Tax Act from investment in one residential house to two residential houses for a taxpayer having capital gains up to Rs. 2 crore.
• This benefit can be availed once in a life time.
• The amount of capital gain can be invested in new houses or construct new house within 3 years from the date of transfer.

This can be diagrammatically explained as follows:

This tax saving could be explained with below example as follows:

The above example could be further solved as follows:

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