Capital Gains: Exemption against Residential Property Sales and Reinvestment Incentives in Clause 82 of the Income Tax Bill, 2025 vs. Section 54 of the Income Tax Act, 1961

Capital gains reinvestment relief: deferral for gains when proceeds are reinvested in residential property with deposit safeguards.

Clause 82 permits deferral or exemption of capital gains from sale of residential property where proceeds are reinvested in another residential property, treating gains exceeding the new asset's cost as taxable. Unutilized gains must be deposited in a specified bank or institution under a notified scheme and such deposits count toward the new asset's cost. Deposited amounts not applied within the prescribed period become taxable though the clause provides for withdrawal of unused sums. The clause allows a one time option to invest in two houses subject to a gain threshold and imposes caps on eligible cost and gains to target relief.