{"id":29571,"date":"2025-07-31T13:34:37","date_gmt":"2025-07-31T08:04:37","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=29571"},"modified":"2025-11-15T18:36:59","modified_gmt":"2025-11-15T13:06:59","slug":"eligible-ineligible-expenses-while-calculating-capital-gain","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/eligible-ineligible-expenses-while-calculating-capital-gain\/","title":{"rendered":"Eligible\/ Ineligible expenses while calculating Capital Gain"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69ef9fb4ccacc\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69ef9fb4ccacc\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/eligible-ineligible-expenses-while-calculating-capital-gain\/#Eligible_Ineligible_expenses_while_calculating_Capital_Gain\" title=\"Eligible &amp; Ineligible expenses while calculating Capital Gain\">Eligible &amp; Ineligible expenses while calculating Capital Gain<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/eligible-ineligible-expenses-while-calculating-capital-gain\/#Eligible_Expenses_Allowed_for_Capital_Gains_Calculation\" title=\"Eligible Expenses (Allowed for Capital Gains Calculation)\">Eligible Expenses (Allowed for Capital Gains Calculation)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/eligible-ineligible-expenses-while-calculating-capital-gain\/#Ineligible_Expenses_Not_Allowable_for_Capital_Gains_Calculation\" title=\"Ineligible Expenses (Not Allowable\u00a0for Capital Gains Calculation)\">Ineligible Expenses (Not Allowable\u00a0for Capital Gains Calculation)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/eligible-ineligible-expenses-while-calculating-capital-gain\/#Important_Note_for_NRIs_from_23_July_2024_onwards\" title=\"Important Note for NRIs (from 23 July 2024 onwards)\">Important Note for NRIs (from 23 July 2024 onwards)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/eligible-ineligible-expenses-while-calculating-capital-gain\/#Furniture_What_to_Note\" title=\"Furniture: What to Note\">Furniture: What to Note<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/eligible-ineligible-expenses-while-calculating-capital-gain\/#Interest_Deduction_Rules\" title=\"Interest Deduction Rules\">Interest Deduction Rules<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/eligible-ineligible-expenses-while-calculating-capital-gain\/#Old_Tax_Regime\" title=\"Old Tax Regime:\">Old Tax Regime:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/eligible-ineligible-expenses-while-calculating-capital-gain\/#New_Tax_Regime\" title=\"New Tax Regime:\">New Tax Regime:<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/eligible-ineligible-expenses-while-calculating-capital-gain\/#How_reinvesting_capital_gains_in_a_house_can_save_tax_us_54_54F_of_the_Income_Tax_Act\" title=\"How reinvesting capital gains in a house can save tax u\/s 54 &amp; 54F of the Income Tax Act.\u00a0\">How reinvesting capital gains in a house can save tax u\/s 54 &amp; 54F of the Income Tax Act.\u00a0<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/eligible-ineligible-expenses-while-calculating-capital-gain\/#Section_54_vs_Section_54F\" title=\"Section 54 vs Section 54F\">Section 54 vs Section 54F<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/eligible-ineligible-expenses-while-calculating-capital-gain\/#FAQs_related_to_reinvesting_capital_gains_in_a_house_can_save_tax_us_54_54F\" title=\"FAQs related to\u00a0reinvesting capital gains in a house can save tax u\/s 54 &amp; 54F \">FAQs related to\u00a0reinvesting capital gains in a house can save tax u\/s 54 &amp; 54F <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/carajput.com\/blog\/eligible-ineligible-expenses-while-calculating-capital-gain\/#Q6_How_This_Links_to_Your_LTCG_Strategy\" title=\"Q.6: How This Links to Your LTCG Strategy\">Q.6: How This Links to Your LTCG Strategy<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 data-start=\"0\" data-end=\"215\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-29572\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/07\/C-Gain-.jpg\" alt=\"eligible and ineligible expenses while calculating Capital Gains\" width=\"1129\" height=\"986\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/07\/C-Gain-.jpg 1035w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/07\/C-Gain--300x262.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/07\/C-Gain--1024x894.jpg 1024w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/07\/C-Gain--768x671.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/07\/C-Gain--800x699.jpg 800w\" sizes=\"(max-width: 1129px) 100vw, 1129px\" \/><\/h2>\n<h2 data-start=\"0\" data-end=\"215\"><span class=\"ez-toc-section\" id=\"Eligible_Ineligible_expenses_while_calculating_Capital_Gain\"><\/span><span style=\"color: #000080;\"><strong>Eligible &amp; Ineligible expenses while calculating Capital Gain<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p data-start=\"0\" data-end=\"215\">Overview of eligible and ineligible expenses while calculating Capital Gains on property sales and highlights specific rules for NRIs and under different tax regimes.<\/p>\n<h3 data-start=\"217\" data-end=\"284\"><span class=\"ez-toc-section\" id=\"Eligible_Expenses_Allowed_for_Capital_Gains_Calculation\"><\/span><span style=\"color: #000080;\"><strong data-start=\"223\" data-end=\"284\">Eligible Expenses (Allowed for Capital Gains Calculation)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"285\" data-end=\"343\">These can be added to the cost of acquisition\/improvement:<\/p>\n<ul data-start=\"344\" data-end=\"590\">\n<li data-start=\"344\" data-end=\"370\">\n<p data-start=\"346\" data-end=\"370\">Brokerage\/Commission<\/p>\n<\/li>\n<li data-start=\"371\" data-end=\"430\">\n<p data-start=\"373\" data-end=\"430\">Structural Renovation <em data-start=\"399\" data-end=\"430\">(if part of a larger project)<\/em><\/p>\n<\/li>\n<li data-start=\"431\" data-end=\"481\">\n<p data-start=\"433\" data-end=\"481\">Painting <em data-start=\"446\" data-end=\"481\">(if part of a renovation project)<\/em><\/p>\n<\/li>\n<li data-start=\"482\" data-end=\"523\">\n<p data-start=\"484\" data-end=\"523\">Legal &amp; Paperwork Charges (at sale)<\/p>\n<\/li>\n<li data-start=\"524\" data-end=\"590\">\n<p data-start=\"526\" data-end=\"590\">Home Loan Interest <em data-start=\"549\" data-end=\"590\">(if not already claimed as a deduction)<\/em><\/p>\n<\/li>\n<\/ul>\n<div class=\"_tableContainer_16hzy_1\">\n<div class=\"_tableWrapper_16hzy_14 group flex w-fit flex-col-reverse\" tabindex=\"-1\">\n<table class=\"w-fit min-w-(--thread-content-width)\" style=\"height: 251px;\" width=\"1096\" data-start=\"289\" data-end=\"963\">\n<thead data-start=\"289\" data-end=\"357\">\n<tr data-start=\"289\" data-end=\"357\">\n<th data-start=\"289\" data-end=\"332\" data-col-size=\"sm\">Expense Category<\/th>\n<th data-start=\"332\" data-end=\"346\" data-col-size=\"sm\">Eligibility<\/th>\n<th data-start=\"346\" data-end=\"357\" data-col-size=\"md\">Remarks<\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"427\" data-end=\"963\">\n<tr data-start=\"427\" data-end=\"511\">\n<td data-start=\"427\" data-end=\"470\" data-col-size=\"sm\"><strong data-start=\"429\" data-end=\"453\">Brokerage\/Commission<\/strong><\/td>\n<td data-col-size=\"sm\" data-start=\"470\" data-end=\"483\">Allowed<\/td>\n<td data-col-size=\"md\" data-start=\"483\" data-end=\"511\">Paid at the time of sale<\/td>\n<\/tr>\n<tr data-start=\"512\" data-end=\"631\">\n<td data-start=\"512\" data-end=\"555\" data-col-size=\"sm\"><strong data-start=\"514\" data-end=\"539\">Structural Renovation<\/strong><\/td>\n<td data-col-size=\"sm\" data-start=\"555\" data-end=\"568\">Allowed<\/td>\n<td data-col-size=\"md\" data-start=\"568\" data-end=\"631\">Permitted only if it is part of a larger renovation project<\/td>\n<\/tr>\n<tr data-start=\"632\" data-end=\"732\">\n<td data-start=\"632\" data-end=\"675\" data-col-size=\"sm\"><strong data-start=\"634\" data-end=\"646\">Painting<\/strong><\/td>\n<td data-col-size=\"sm\" data-start=\"675\" data-end=\"688\">Allowed<\/td>\n<td data-col-size=\"md\" data-start=\"688\" data-end=\"732\">Allowed only if part of major renovation<\/td>\n<\/tr>\n<tr data-start=\"733\" data-end=\"841\">\n<td data-start=\"733\" data-end=\"776\" data-col-size=\"sm\"><strong data-start=\"735\" data-end=\"774\">Legal &amp; Paperwork Charges (at sale)<\/strong><\/td>\n<td data-col-size=\"sm\" data-start=\"776\" data-end=\"789\">Allowed<\/td>\n<td data-col-size=\"md\" data-start=\"789\" data-end=\"841\">Includes registration\/legal fees at time of sale<\/td>\n<\/tr>\n<tr data-start=\"842\" data-end=\"963\">\n<td data-start=\"842\" data-end=\"885\" data-col-size=\"sm\"><strong data-start=\"844\" data-end=\"866\">Home Loan Interest<\/strong><\/td>\n<td data-col-size=\"sm\" data-start=\"885\" data-end=\"898\">Allowed*<\/td>\n<td data-col-size=\"md\" data-start=\"898\" data-end=\"963\">Only if not claimed earlier as a deduction (under Section 24)<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<div class=\"sticky end-(--thread-content-margin) h-0 self-end select-none\">\n<div><\/div>\n<div class=\"absolute end-0 flex items-end\"><em data-start=\"967\" data-end=\"1065\">These can be <strong data-start=\"204\" data-end=\"252\">added to the cost of acquisition\/improvement<\/strong> and reduce taxable capital gains.\u00a0 Can be capitalized if not already claimed as a deduction under income from house property.<\/em><\/div>\n<\/div>\n<\/div>\n<\/div>\n<h3 data-start=\"592\" data-end=\"621\"><span class=\"ez-toc-section\" id=\"Ineligible_Expenses_Not_Allowable_for_Capital_Gains_Calculation\"><\/span><span style=\"color: #000080;\"><strong data-start=\"598\" data-end=\"621\">Ineligible Expenses (Not Allowable<\/strong><strong data-start=\"223\" data-end=\"284\">\u00a0for Capital Gains Calculation)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"622\" data-end=\"668\">These <strong data-start=\"628\" data-end=\"638\">cannot<\/strong> be claimed for capital gains:<\/p>\n<ul data-start=\"669\" data-end=\"785\">\n<li data-start=\"669\" data-end=\"702\">\n<p data-start=\"671\" data-end=\"702\">Routine repairs and maintenance<\/p>\n<\/li>\n<li data-start=\"703\" data-end=\"733\">\n<p data-start=\"705\" data-end=\"733\">Property tax\/society charges<\/p>\n<\/li>\n<li data-start=\"734\" data-end=\"764\">\n<p data-start=\"736\" data-end=\"764\">Tenant eviction compensation<\/p>\n<\/li>\n<li data-start=\"765\" data-end=\"785\">\n<p data-start=\"767\" data-end=\"785\">Mortgage repayment<\/p>\n<\/li>\n<\/ul>\n<p data-start=\"1103\" data-end=\"1158\"><em data-start=\"1103\" data-end=\"1158\">These <strong data-start=\"1111\" data-end=\"1121\">cannot<\/strong> be claimed to reduce capital gains<\/em><\/p>\n<div class=\"_tableContainer_16hzy_1\">\n<div class=\"_tableWrapper_16hzy_14 group flex w-fit flex-col-reverse\" tabindex=\"-1\">\n<table class=\"w-fit min-w-(--thread-content-width)\" data-start=\"1160\" data-end=\"1739\">\n<thead data-start=\"1160\" data-end=\"1227\">\n<tr data-start=\"1160\" data-end=\"1227\">\n<th data-start=\"1160\" data-end=\"1203\" data-col-size=\"sm\">Expense Category<\/th>\n<th data-start=\"1203\" data-end=\"1217\" data-col-size=\"sm\">Eligibility<\/th>\n<th data-start=\"1217\" data-end=\"1227\" data-col-size=\"md\">Reason<\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"1296\" data-end=\"1739\">\n<tr data-start=\"1296\" data-end=\"1408\">\n<td data-start=\"1296\" data-end=\"1339\" data-col-size=\"sm\"><strong data-start=\"1298\" data-end=\"1331\">Routine Repairs &amp; Maintenance<\/strong><\/td>\n<td data-col-size=\"sm\" data-start=\"1339\" data-end=\"1355\">Not Allowed<\/td>\n<td data-col-size=\"md\" data-start=\"1355\" data-end=\"1408\">Considered revenue expense, not capital in nature<\/td>\n<\/tr>\n<tr data-start=\"1409\" data-end=\"1528\">\n<td data-start=\"1409\" data-end=\"1452\" data-col-size=\"sm\"><strong data-start=\"1411\" data-end=\"1443\">Property Tax\/Society Charges<\/strong><\/td>\n<td data-col-size=\"sm\" data-start=\"1452\" data-end=\"1468\">Not Allowed<\/td>\n<td data-col-size=\"md\" data-start=\"1468\" data-end=\"1528\">Operational expense, not part of acquisition\/improvement<\/td>\n<\/tr>\n<tr data-start=\"1529\" data-end=\"1629\">\n<td data-start=\"1529\" data-end=\"1572\" data-col-size=\"sm\"><strong data-start=\"1531\" data-end=\"1563\">Tenant Eviction Compensation<\/strong><\/td>\n<td data-col-size=\"sm\" data-start=\"1572\" data-end=\"1588\">Not Allowed<\/td>\n<td data-col-size=\"md\" data-start=\"1588\" data-end=\"1629\">Treated as personal or administrative<\/td>\n<\/tr>\n<tr data-start=\"1630\" data-end=\"1739\">\n<td data-start=\"1630\" data-end=\"1673\" data-col-size=\"sm\"><strong data-start=\"1632\" data-end=\"1666\">Mortgage Repayment (Principal)<\/strong><\/td>\n<td data-col-size=\"sm\" data-start=\"1673\" data-end=\"1689\">Not Allowed<\/td>\n<td data-col-size=\"md\" data-start=\"1689\" data-end=\"1739\">Only interest (if not deducted) may be allowed<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<h3 data-start=\"792\" data-end=\"854\"><span class=\"ez-toc-section\" id=\"Important_Note_for_NRIs_from_23_July_2024_onwards\"><\/span><span style=\"color: #000080;\"><strong data-start=\"799\" data-end=\"854\">Important Note for NRIs (from 23 July 2024 onwards)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul data-start=\"855\" data-end=\"978\">\n<li data-start=\"855\" data-end=\"900\">\n<p data-start=\"857\" data-end=\"900\">No Indexation Benefit on property sale.<\/p>\n<\/li>\n<li data-start=\"901\" data-end=\"978\">\n<p data-start=\"903\" data-end=\"978\">But NRIs can still claim valid capital improvements with documentation.<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"985\" data-end=\"1019\"><span class=\"ez-toc-section\" id=\"Furniture_What_to_Note\"><\/span><span style=\"color: #000080;\"><strong data-start=\"992\" data-end=\"1019\">Furniture: What to Note<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul data-start=\"1020\" data-end=\"1233\">\n<li data-start=\"1020\" data-end=\"1086\">\n<p data-start=\"1022\" data-end=\"1086\">Furniture used for personal purposes is a &#8220;personal effect&#8221;.<\/p>\n<\/li>\n<li data-start=\"1087\" data-end=\"1122\">\n<p data-start=\"1089\" data-end=\"1122\">Excluded from capital assets.<\/p>\n<\/li>\n<li data-start=\"1123\" data-end=\"1168\">\n<p data-start=\"1125\" data-end=\"1168\">No capital gains tax on such furniture.<\/p>\n<\/li>\n<li data-start=\"1169\" data-end=\"1233\">\n<p data-start=\"1171\" data-end=\"1233\">However, maintain original invoices as proof of ownership.<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"1240\" data-end=\"1275\"><span class=\"ez-toc-section\" id=\"Interest_Deduction_Rules\"><\/span><span style=\"color: #000080;\"><strong data-start=\"1247\" data-end=\"1275\">Interest Deduction Rules<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<h4 data-start=\"1276\" data-end=\"1301\"><span class=\"ez-toc-section\" id=\"Old_Tax_Regime\"><\/span><span style=\"color: #000080;\"><em data-start=\"1284\" data-end=\"1300\">Old Tax Regime<\/em>:<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul data-start=\"1302\" data-end=\"1603\">\n<li data-start=\"1302\" data-end=\"1352\">\n<p data-start=\"1304\" data-end=\"1352\">Self-occupied: \u20b92 lakh cap\/year on interest.<\/p>\n<\/li>\n<li data-start=\"1353\" data-end=\"1446\">\n<p data-start=\"1355\" data-end=\"1446\">Let-out: No cap on interest, but only \u20b92 lakh\/year can be set off against other income.<\/p>\n<\/li>\n<li data-start=\"1447\" data-end=\"1530\">\n<p data-start=\"1449\" data-end=\"1530\">Excess loss: Can be carried forward for 8 years (house property income only).<\/p>\n<\/li>\n<li data-start=\"1531\" data-end=\"1603\">\n<p data-start=\"1533\" data-end=\"1603\">If construction not completed within 5 years \u2192 limit drops to \u20b930,000.<\/p>\n<\/li>\n<\/ul>\n<h4 data-start=\"1605\" data-end=\"1630\"><span class=\"ez-toc-section\" id=\"New_Tax_Regime\"><\/span><em data-start=\"1613\" data-end=\"1629\">New Tax Regime<\/em>:<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul data-start=\"1631\" data-end=\"1803\">\n<li data-start=\"1631\" data-end=\"1692\">\n<p data-start=\"1633\" data-end=\"1692\">Interest deduction allowed only for let-out properties.<\/p>\n<\/li>\n<li data-start=\"1693\" data-end=\"1803\">\n<p data-start=\"1695\" data-end=\"1803\">Home loan interest can be capitalized to reduce capital gains if not already claimed as a deduction.<\/p>\n<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"How_reinvesting_capital_gains_in_a_house_can_save_tax_us_54_54F_of_the_Income_Tax_Act\"><\/span><span style=\"color: #000080;\">How <strong>reinvesting capital gains in a house can save tax u\/s 54 &amp; 54F of the Income Tax Act<\/strong>.\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-30448\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/07\/Reinvesting-capital-gains-in-a-house-saves-tax.-.jpg\" alt=\"How reinvesting capital gains in a house can save tax u\/s 54 &amp; 54F of the Income Tax Act.\u00a0 \" width=\"1126\" height=\"1280\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/07\/Reinvesting-capital-gains-in-a-house-saves-tax.-.jpg 1126w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/07\/Reinvesting-capital-gains-in-a-house-saves-tax.--264x300.jpg 264w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/07\/Reinvesting-capital-gains-in-a-house-saves-tax.--901x1024.jpg 901w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/07\/Reinvesting-capital-gains-in-a-house-saves-tax.--768x873.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/07\/Reinvesting-capital-gains-in-a-house-saves-tax.--800x909.jpg 800w\" sizes=\"(max-width: 1126px) 100vw, 1126px\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Section_54_vs_Section_54F\"><\/span><span style=\"color: #000080;\"><strong>Section 54 vs Section 54F<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"___i31lg00 f10pi13n f14t3ns0 f1nbblvp fat0sn4 f1ov4xf1 fekwl8i f1lmfglv f1oz7aqm f1abmfm4 f1w619qj f16h0jq8\">\n<table class=\"___1hm93bs f1ddd56o f16vktn6 f1enuhaj fdclmfp f1ev3kgc ftgm304 f1uinfot fibjyge fvueend f9yszdx f1fu4s3n f3l3pb3 f1s2k7dp f8fmt76 fjvbh62 fysh76l fic4ptz f1yenhzu f1yn6nvh f14tj6oe f1jq587y f1el8yx3 f1pymoxg f1ofu761 fe6itr f7coize f1794535 f70r78m f4zgifc fk1v6el f16pyhcb fo436u6 fzy4j18 fc43013 f1hmrcvb fc4t9fq fgp09rh fjnyn6r\">\n<thead>\n<tr>\n<th><strong>Aspect<\/strong><\/th>\n<th><strong>Section 54<\/strong><\/th>\n<th><strong>Section 54F<\/strong><\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<th scope=\"row\">Applicable to<\/th>\n<td>Sale of real estate property<\/td>\n<td>Sale of shares, mutual funds, gold, etc.<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Time Limit<\/th>\n<td>1 year before or 2 years after selling the asset; 3 years if constructing a house<\/td>\n<td>Same<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Amount to Reinvest<\/th>\n<td>Only capital gains<\/td>\n<td>Full sale proceeds<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">If new house price is lower<\/th>\n<td>Remaining capital gains taxed<\/td>\n<td>Exemption = cost of new house \u00d7 capital gains \u00f7 sale proceeds<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Condition on owning house<\/th>\n<td>No restriction<\/td>\n<td>Cannot hold more than one house at time of sale<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Revocation<\/th>\n<td>If house sold within 3 years of claiming benefit<\/td>\n<td>Same<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Max exemption<\/th>\n<td>INR 10 crore<\/td>\n<td>INR 10 crore<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<h3><span class=\"ez-toc-section\" id=\"FAQs_related_to_reinvesting_capital_gains_in_a_house_can_save_tax_us_54_54F\"><\/span><span style=\"color: #000080;\"><strong>FAQs related to\u00a0<\/strong><strong>reinvesting capital gains in a house can save tax u\/s 54 &amp; 54F <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"color: #000080;\"><strong>Q.1: Do debt funds qualify?<\/strong><\/span><br \/>\nYes, if bought after April 1, 2023 and sold after 3 years (or 2 years if sold after July 23, 2024).<\/p>\n<p><span style=\"color: #000080;\"><strong>Q.2:\u00a0 Can I claim both Sec 54 &amp; 54F?<\/strong><\/span><br \/>\nYes, but subject to conditions.<\/p>\n<p><span style=\"color: #000080;\"><strong>Q.3: Can I buy land?<\/strong><\/span><br \/>\nYes, but must construct house within 3 years.<\/p>\n<p><span style=\"color: #000080;\"><strong>Q.4: Under-construction delay beyond 3 years?<\/strong><\/span><br \/>\nCourts allow if delay is builder\u2019s fault.<\/p>\n<p><span style=\"color: #000080;\"><strong>Q.5: Can I repay home loan with sale amount?<\/strong><\/span><br \/>\nYes, if other conditions are met.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Q6_How_This_Links_to_Your_LTCG_Strategy\"><\/span><span style=\"color: #000080;\"><strong>Q.6: How This Links to Your LTCG Strategy<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>If you have a large\u00a0LTCG from mutual funds, instead of paying 12.5% tax, you can invest full sale proceeds in a residential property under\u00a0 Section 54F.\u00a0This is especially useful if\u00a0gains exceed the INR 1.25 lakh exemption limit. and You plan to buy or construct a house anyway. Taxpayer must follow the caution as mentioned below:<\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>You must invest entire sale proceeds, not just gains, for Section 54F.<\/li>\n<li>Lock-in: Cannot sell the new house within 3 years.<\/li>\n<li>If you already own more than one house, Section 54F benefit is not available.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Eligible &amp; Ineligible expenses while calculating Capital Gain Overview of eligible and ineligible expenses while calculating Capital Gains on property sales and highlights specific rules for NRIs and under different tax regimes. Eligible Expenses (Allowed for Capital Gains Calculation) These can be added to the cost of acquisition\/improvement: Brokerage\/Commission Structural Renovation (if part of a &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[150],"tags":[10268],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/29571"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=29571"}],"version-history":[{"count":4,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/29571\/revisions"}],"predecessor-version":[{"id":30450,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/29571\/revisions\/30450"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=29571"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=29571"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=29571"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}