Income tax rules on sale of second house explained

Answer: I understand that you are referring to the exemption available under section 54 of the Income Tax Act. This exemption is available in respect of long-term capital gain arising on sale of a residential house held for 24 months or more, if such long-term capital gain is realized within the specified time by purchase/construction of another residential house in India is invested for.

There is no restriction on the number of times you can avail of this tax benefit, as long as the long term capital gain on sale of one house is invested in another house. You can also claim this exemption in case of more than one house sold during the year, provided you fulfill the basic conditions.

You can also claim this exemption in respect of more than one residential house by investing long-term capital gains in one house in India. If the capital gain arising from the sale of a residential house is invested for the purchase or construction of more than one residential house, you will get the benefit only in respect of the capital gain invested in one house. However, a once in a lifetime opportunity can be availed to claim exemption from long-term capital gain by investing in two residential properties on sale of one residential house, provided the amount of such long-term capital gain does not exceed rupees two crore. not exceed Rs. Further, there is no restriction on the number of houses you can own on the date of sale of the residential house property for claiming exemption under this section.

Balwant Jain is a tax and investment expert and can be reached on his Twitter handles at jainbalwant@gmail.com and @jainbalwant.