TaxTMI 
TaxTMI 
My Client has long term capital gain in FY 2023-24 Rs 4500000 & FY 2024-25 Rs 1000000 against sale of Land. He purchased a residential house in FY 2024-25 Rs 7045000. He claimed exemption U/s. 54F in FY 2023-24 Rs 4500000. Can he avail of exemption U/s. 54F in FY 2024-25 on Rs 1000000?
Capital Gain Exemption U/s 54F
05 Jun 2025 
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Capital gain exemption under Section 54F can apply to subsequent gains where reinvestment and ownership conditions are met.
The governing framework is Section 54F, which conditions exemption on reinvestment of the net consideration in a residential house within specified time limits and on the assessee not owning more than one residential house (other than the new asset) at the relevant dates. The statutory test looks to the investment actually made in the residential asset and whether it covers the capital gains sought to be exempted. If the purchase falls within the prescribed period and the investment exceeds the combined gains while the ownership condition is satisfied, the same investment may be relied upon for successive long-term capital gains. (AI Summary)
The governing framework is Section 54F, which conditions exemption on reinvestment of the net consideration in a residential house within specified time limits and on the assessee not owning more than one residential house (other than the new asset) at the relevant dates. The statutory test looks to the investment actually made in the residential asset and whether it covers the capital gains sought to be exempted. If the purchase falls within the prescribed period and the investment exceeds the combined gains while the ownership condition is satisfied, the same investment may be relied upon for successive long-term capital gains. (AI Summary)