Under-Construction Property & Capital Gains Tax: A Smart Investment

Can You Avoid Capital Gains Tax? If you sell shares and mutual funds worth Rs 60 lakh, you can save tax by reinvesting in an under-construction residential project.

Eligibility for Tax Exemption

• Under Section 54F, you must invest the entire sale amount in a new residential property.
• The property must be purchased within two years or constructed within three years.
• The exemption is proportionate if the entire amount is not invested.

Joint Purchase With Spouse

• If the property is jointly purchased, both can claim tax exemption.
• Exemption is based on each person’s contribution to the purchase.

Key Takeaways

• Reinvest full sale proceeds to avoid LTCG tax.
• The project should be completed within three years.
• Keep all payment proofs for claiming exemption.

Did You Know? A taxpayer can deposit the capital gains in a Capital Gains Account Scheme (CGAS) if the purchase is delayed beyond the tax filing deadline!

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Rupesh Jadhav is the founder of Rupesh Financial Expert, a finance-focused website dedicated to helping Indian investors make informed financial decisions. He writes about mutual funds, SIP investments, government schemes, retirement planning, and personal finance. His goal is to simplify complex financial concepts through research-based and educational content.