Capital gains tax on sale of under-construction property and reinvestment of capital gains

• Type of Gain: Short-Term Capital Gain (STCG)

  • 
    Reason: Less than 36 months required for long-term.

• Tax Exemption: Not eligible.

  • 
    Reason: STCG does not qualify for exemptions under Section 54F or similar sections.

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Thank you.

Shubham Goyal

Thank you for pointing out the oversight. You are correct that the holding period for immovable property to qualify as long-term capital gains was changed to 24 months in the 2017-18 Budget. I apologize for the confusion caused by my previous responses.

Corrected Analysis

1. Classification of Capital Gains:

   • 
     Period of Holding: From 14th Jan 2021 to 21st Dec 2023, which is nearly 35 months.
   • 
     Type of Gain: Long-Term Capital Gain (LTCG) (since the holding period exceeds 24 months).

2. Tax Exemption on Reinvestment:

   • 
     Eligibility: You may be eligible for exemption under Section 54F if you reinvest the capital gains in another residential property.
   • 
     Section 54F: Allows for exemption if the proceeds from the sale of a long-term capital asset (other than a residential house) are reinvested in a residential house.

1. STCG

2. No benefit of exemption u/s 54F

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