Double the Homes, Double the Tax Benefits: Understanding LTCG Exemption

Taxpayers looking to reinvest their long-term capital gains (LTCG) from the sale of a residential property can indeed purchase two residential houses to claim exemption—under specific conditions. As per Section 54 of the Income Tax Act, individuals or Hindu Undivided Families (HUFs) can avail this benefit, provided the LTCG amount does not exceed Rs 2 crore.  

This exemption is a once-in-a-lifetime opportunity, meaning if a taxpayer has not previously used this provision, they can invest their LTCG in two separate residential properties. The purchase must be completed within two years after the sale or one year before the sale of the original property. If the taxpayer opts for construction instead, the new house must be completed within three years from the date of sale.  

Additionally, the unutilized LTCG amount must be deposited in a Capital Gains Account Scheme before the due date of filing the Income Tax Return (ITR). The law does not restrict taxpayers from buying properties in joint names with family members, as long as the required LTCG amount is invested in their name.  

Sources: Livemint, MSN, Economic Times.