Exemption from capital gains on transfer of residential house property

Due to a specific cause, a guy decided to move; as a result, he sold his old home and used the funds to buy a new one. In this instance, the seller's goal was to purchase another appropriate property rather than to make money by selling the previous one. It would be difficult for the seller in this situation if he had to pay income tax on capital gains on the sale of the old residence. Such a burden is relieved under this section. A taxpayer who sells his primary residence and buys another one with the profits is granted relief under this section. This portion discusses the specific provisions in depth. Get tax deduction under section 80 g.

Get tax exemption under registration of 80g.

To be eligible for this section's benefits, you must meet the requirements listed below:-

(a) You must be an individual or a HUF.

(b) The transferred asset must be a residential property that is a long-term capital asset.

(c) The taxpayer must either purchase another residential house within a timeframe of one year before or two years after the date of transport of the previous house or must build a residential house within a period of three years following the date of transfer of the old house. The time of construction or acquisition in the case of forced acquisition shall be calculated starting from the date of receiving compensation (whether original or extra).

The exemption is only available in relation to one residential property that was bought or built in India. If more than one house is bought or built, only one house will be eligible for the exemption under this section. Regarding a home bought outside of India, no exemption may be requested. 80g is a boon for NGOs.

The Finance Act of 2020 modified Section 54 with effect for Assessment Year 2021–2022 to prolong the advantage of the exemption in relation to investments made in two residential dwelling properties. If the number of long-term capital gains does not exceed Rs. 2 crores, the investment exemption for two residential home properties created through building or acquisition is possible. If the assessee uses this option, he is not permitted to do so for the same or any subsequent assessment year.

Know more at the URL section 80g of income tax act.