There are three different methods to save long term capital gains tax on the sale of a property. a) Tax exemption on sale of a house property – Long-term capital gains tax on the sale of a house property is exempted if the taxpayer reinvest entire amount into the purchase or construction of another house property. A taxpayer can invest into 2 house properties but the budget must not exceed Rs 2 crores. b) Tax exemption on sale of an asset other than house property – The only way to avoid long-term capital gains tax on the sale of an asset other than house property is by investing the entire sale amount into a new residential house property. The entire sale amount will be exempted from the capital gains tax. The limit for a taxpayer is one house property. c) Tax exemption on the sale of a house property – Another method to save tax on the sale of a house property is by reinvesting the capital gains into specific bonds as instructed by IRC. The taxpayer has to invest the capital gains in six months to enjoy the tax exemption. Important: New house and bonds cannot be sold before 3 years of purchase or else tax exemption will be taken back.