How to save Capital Gains Tax on Sale of Land / House Property by claiming Exemptions?

Capital asset here refers to Land & house property that you own for personal or investment purposes. When you sell a capital asset, the difference between the purchase price of the asset and the amount you sell it for is a capital gain or a capital loss. Capital gains and losses are classified as long-term or short-term. In the below table is the way to save long term capital gain tax:


Note 1: Property is held for months more than 24 months then that Asset is treated as Long Term Capital Asset.

Note 2: Apart from the above section 54GB also allows one to save capital gain tax on sale of Property. This has been introduced in 2019 Budget.

Section 54GB and Its Conditions

Under Section 54GB (5) of the Income Tax Act, 1961, long term capital gains on the sale of residential property will be exempt if the sale proceeds are invested in an eligible startup, provided such transfer took place prior to March 31, 2021

Meaning of Eligible Company – Eligible company means a company who fulfills all the following conditions

  1. it is engaged in the business of manufacture of an article or a thing
  2. it is a company in which the assessee has more than 25 per cent share capital & voting rights after the subscription in shares by the assessee; and
  3. it is a company which qualifies to be a small or medium enterprise under the Micro, Small and Medium Enterprises Act, 2006 (27 of 2006); i.e. investment in equipment is more than Rs. 25 lakhs but less than Rs. 10 crores.