Capital gains tax - reinvestment under section54

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  1. sunita mohanty

    sunita mohanty New Member

    i have a residential property purchased in 2007 that i am planning on selling the same this FY. I am planning to reinvest the capital gains in purchasing a residential plot. i have the following queries:
    1. Is this permitted as tax exempt under section 54 ?or does the capital gains necessarily need to be reinvested in residential house property?
    2. are there any restrictions under tax exemptions under section 54, if i own other residential properties as well?

  2. rudrabose

    rudrabose Active Member

    1. Exemption can only be claimed if the Capital Gains is reinvested in a Residential House and not in a Residential Plot. However, even if there is a small room on the Residential Plot - it can be considered as a Residential House.
    2. There is no condition as such with respect to the no. of residential houses you own for claiming exemption under section 54.
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