While presenting interim Budget 2019-20 Finance Minister proposed to increase the benefit of rollover of capital gains under Section 54 of the Income Tax Act from investment in one residential house to two residential houses for a taxpayer having capital gains up to Rs. 2 crore.

This benefit can be availed once in a life time.

Proposed Amendment in section 54 of Income Tax Act, 1961

6. In section 54 of the Income-tax Act, in sub-section (1), after clause (ii), the following provisos shall be inserted with effect from the 1st day of April, 2020, namely:––

‘Provided that where the amount of the capital gain does not exceed two crore rupees, the assessee, may at his option, purchase or construct two residential houses in India, and where such an option has been exercised,––

(a) the provisions of this sub-section shall have effect as if for the words “one residential house in India”, the words “two residential houses in India” had been substituted;

(b) any reference in this sub-section and sub-section (2) to “new asset” shall be construed as a reference to the two residential houses in India:

Provided further that where during any assessment year, the assessee has exercised the option referred to in the first proviso, he shall not be subsequently entitled to exercise the option for the same or any other assessment year.’.

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  1. guddu says:

    Could a investment be made into multiple houses if it was done in 2012 . when exactly was act amended from a property to one property . was it in the year 2015

  2. Soubhik says:

    If an assessee has sold residential house property in the year 2017 and has bought a new residential flat in the same year and deposited the balance amount of LTCG amount in a Capital Gains bank account; can the assessee purchase a second residential flat for the amount remaining unutilised in the capital gains bank account after April 2019 within 2 years of the sale of the residential house? kindly reply

  3. Parimal says:

    If Capital Gains exceeds 2 crores, and if an assesses buys 2 houses, the excess of 2 crores will be taxed or the very eligibility to buy second home is extinguished.

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March 2021