Income Tax Act, 2025
Section 2: Ins. by Act 28 of 2016, s. 32 (w.e.f 12017).
2. Ins. by Act 28 of 2016, s. 32 (w.e.f 12017).
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Explanation 1.—In a case where the original asset is transferred and the assessee invests the whole or
any part of the capital gain received or accrued as a result of transfer of the original asset in any long-term
specified asset and such assessee takes any loan or advance on the security of such specified asset, he
shall be deemed to have transferred such specified asset on the date on which such loan or advance is
taken.
Explanation 2.—For the purposes of this section,—
(a) “cost”, in relation to any long -term specified asset, means the amount invested in such
specified asset out of capital gains received or accruing as a result of the transfer of the original asset;
(b) “long-term specified asset” means a unit or units, issued before the 1st day of April, 2019, of
such fund as may be notified by the Central Government in this behalf.]
1[54F. Capital gain on transfer of certain capital assets not to be charged in case of investment
in residential house.—(1) 2[Subject to the provisions of sub-section (4), where, in the case of an assessee
being an individual or a Hindu undivided family, the capital gain arises from the transfer of any long-term
capital asset, not being a residential house (hereafter in this section referred to as the original asset), and
the assessee has, within a period of one year before or 3[two years] after the date on which the transfer
took place purchased, or has within a period of three years after that date 4[constructed, one residential
house in India] (hereafter in this section referred to as the new asset), the capital gain shall be dealt with
in accordance with the following provisions of this section, that is to say,—
(a) if the cost of the new asset is not less than the net consideration in respect of the original asset,
the whole of such capital gain shall not be charged under section 45;
(b) if the cost of the new asset is less than the net consideration in respect of the original asset, so
much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of
the new asset bears to the net consideration, shall not be charged under section 45:
5[Provided that nothing contained in this sub-section shall apply where—
(a) theassessee,—
(i) owns more than one residential house, other than the new asset, on the date of transfer
of the original asset; or
(ii) purchases any residential house, other than the new asset, within a period of one year
after the date of transfer of the original asset; or
(iii) constructs any residential house, other than the new asset, within a period of three
years after the date of transfer of the original asset; and
(b) the income from such residential house, other than the one residential house owned on the
date of transfer of the original asset, is chargeable under the head “Income from house property”.]
Explanation.—For the purposes of this section,—
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“cost”, in relation to any long -term specified asset, means the amount invested in such
specified asset out of capital gains received or accruing as a result of the transfer of the original asset;
“long-term specified asset” means a unit or units, issued before the 1st day of April, 2019, of
such fund as may be notified by the Central Government in this behalf.]
1[54F. Capital gain on transfer of certain capital assets not to be charged in case of investment
in residential house.—
2[Subject to the provisions of sub-section
if the cost of the new asset is not less than the net consideration in respect of the original asset,
the whole of such capital gain shall not be charged under section 45;
if the cost of the new asset is less than the net consideration in respect of the original asset, so
much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of
the new asset bears to the net consideration, shall not be charged under section 45:
5[Provided that nothing contained in this sub-section shall apply where—
theassessee,—
owns more than one residential house, other than the new asset, on the date of transfer
of the original asset; or
purchases any residential house, other than the new asset, within a period of one year
after the date of transfer of the original asset; or
constructs any residential house, other than the new asset, within a period of three
years after the date of transfer of the original asset; and
the income from such residential house, other than the one residential house owned on the
date of transfer of the original asset, is chargeable under the head “Income from house property”.]
Explanation.—For the purposes of this section,—
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