Capital Gains Exemption Calculator (54, 54EC, 54F)
Find how much of a long-term capital gain you can shelter by buying a house or investing in specified bonds, what is left to tax, and the deadlines to invest. Runs in your browser; nothing is uploaded.
A worked example
Say you sell a residential house for a long-term gain of Rs 50,00,000, and within the time limit you buy another residential house for Rs 60,00,000. Section 54 exempts the lower of the gain and the cost of the new house, and here the new house costs more than the gain, so the whole Rs 50,00,000 is exempt and there is nothing left to tax. If you had instead bought a house for only Rs 30,00,000, the exemption would be capped at that Rs 30,00,000, leaving Rs 20,00,000 taxable at 12.5% plus cess.
Understanding the calculation
- Section 54
- Exempt amount is the lower of the gain and the cost of the new house, with the cost counted up to Rs 10 crore.
- Section 54F
- Exempt amount is the gain times (amount invested in the house divided by net sale proceeds), up to the full gain. It needs the net proceeds, not just the gain.
- Section 54EC
- Exempt amount is the lower of the gain and the bonds bought, and the bonds counted are capped at Rs 50 lakh.
- The tax shown
- The remaining gain at 12.5% plus 4% cess, without indexation and surcharge. If your property qualifies for the 20% with indexation option, work that out on the Property Capital Gains page.
Common questions
What is Section 54?
Section 54 exempts a long-term capital gain on selling a residential house if you buy or build another residential house in India. You must buy it within one year before or two years after the sale, or construct it within three years after. The exempt amount is the gain or the cost of the new house, whichever is lower, and the cost counted is capped at Rs 10 crore.
What is Section 54F?
Section 54F exempts a long-term gain on any asset other than a residential house, such as shares, gold, land or a commercial building, if you invest the net sale proceeds in a residential house. If you invest all of the net proceeds the whole gain is exempt; if you invest less, the exemption is the gain multiplied by the amount invested over the net proceeds. You must not own more than one other residential house when you sell, and the Rs 10 crore cap applies.
What is Section 54EC?
Section 54EC exempts a long-term gain on land or a building if you invest it within six months of the sale in specified bonds, currently those of NHAI, REC, PFC and IRFC. The bonds have a five-year lock-in. The total you can invest across the financial year of the sale and the next one is capped at Rs 50 lakh, which caps the exemption at Rs 50 lakh.
Can I use more than one section?
Often yes. For land or a building you can claim Section 54F on part of the gain and Section 54EC on another part, as long as the total exemption never exceeds the gain. This calculator adds them and stops at the size of the gain.
What if I cannot invest before I file my return?
You can deposit the unused amount in a Capital Gains Account Scheme account with an authorised bank by the due date for filing your return, and use it for the house within the time limit. Money not used in time becomes taxable. This calculator does not model that account.
Are these the only conditions?
No. There are further conditions, such as not selling the new house or the bonds within the lock-in period, and details about what counts as a residential house. This tool works out the arithmetic and shows the deadlines, but eligibility is for you and a Chartered Accountant to confirm.