Exemption of Long-Term Capital Gains regarding Residential House Property (Section 54) in case of NRI
[Capital Gain of an NRI could be Completely Exempt from Income Tax]
An NRI is permitted to invest without any formal permission of RB! in a residential house property in India. The residential house property may be self-occupied or a tenanted one. If there is a long-term capital gain on the sale of a residential house property, then it is provided in Section 54 that if the long-term capital gain is fully invested in the purchase of a residential house property, within one year before or two years after the transfer of the first house property, the entire long-term capital gains would be fully exempt from income tax. Further, this exemption is also available if the entire long-term capital gain is invested in the construction of a new house property in three years from the date of the transfer. However, if the long-term capital gain exceeds the cost of the new property so acquired, the excess would be taxable.
Capital Gain of an NRI could be Completely Exempt from Income Tax
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