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Capital gains exemption for construction of House

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girish Rao

19 Points Posted on 26 January 2022

Hi,

How can we take exemption for Capital gains u/s 54 for construction of House within 3 years ?

How do we know the Expense that we do in future.

Should we keep it in CGS account and utilise it accordingly ?

Please clarify

Replies (2)

Quick Summary

This discussion clarifies how to claim capital gains tax exemption under Section 54 when constructing a new house. To qualify, the entire capital gain must be used for construction within three years. Funds can be deposited into a Capital Gains Account Scheme (CGS) before filing your tax return and utilised accordingly. This exemption specifically applies to individuals selling an old house property.

prasad Nilugal

GST Practitioner & Accounts

15146 Points Posted on 26 January 2022

You have to spend entire amount of Capital Gain in order to claim exemption under section 54 of the Income tax act for construction of new house , also you have to invest in Capital Gain Account before the filing of return and you can untilse capital gains , for construction of house within stipulated period .
This exemption under section 54, is available only to individual for sale of old house property not other Asset.