How can I save capital gains tax on selling property?
You can legally save long-term capital gains tax on a property sale by reinvesting under Sections 54, 54F or 54EC. Section 54 exempts gains reinvested in another residential house (within 1 year before or 2 years after sale, or 3 years for construction). Section 54EC exempts gains up to ₹50 lakh invested in NHAI/REC bonds within 6 months.
1Reinvest in a house (Section 54 / 54F)
Section 54: reinvest the capital gain from selling a residential house into another residential house. Section 54F: reinvest the net sale proceeds from any long-term asset into a house. Time limits: buy within 2 years or construct within 3 years.
2Capital gains bonds (Section 54EC)
Invest the long-term gains (up to ₹50 lakh per financial year) in specified NHAI/REC/PFC bonds within 6 months of sale. They have a 5-year lock-in. You can combine 54 and 54EC for larger gains.
Frequently asked questions
Where do I park the gains if I haven't reinvested before filing the ITR?
Deposit the unutilised gains in a Capital Gains Account Scheme (CGAS) with a bank before the ITR due date, then use it for the purchase/construction within the allowed time to keep the exemption.
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General information for AY 2026-27, not professional advice. Laws change with each Finance Act, notification or amendment and depend on your specific facts — verify the current position with a licensed CA or advocate before acting.