Capital Gains Exemptions under the Income‑tax Act, 1961,

Applies to individuals and HUFs who sell a long‑term residential property (held > 24 months).
Exemption is available if capital gains are reinvested in another residential property, purchased within 1 year before or 2 years after sale, or constructed within 3 years.
Exemption amount = lower of capital gain or cost of new property, capped at ₹10 crore from AY 2024‑25 onward.
If the new house is sold within 3 years, exemption is revoked and previously exempt gains become taxable.

Gain ₹35 L; reinvest ₹20 L → exempt ₹20 L, ₹15 L taxable. If reinvest full ₹35 L → full exemption.

Applicable to sale of any long‑term asset except residential house (e.g. land, shares, gold), by individuals/HUFs.
Entire net sale proceeds must be invested to claim full exemption. If partial, exemption is proportional:
Exemption = ₹(Cost of new house × Capital gain ÷ Net sale consideration)
Conditions include: owning no more than one residential house at sale, and no additional purchases/constructions within 2/3 years.
Same ₹10 crore cap applies. Exemption reversed if new house sold within 3 years

Available to individuals/HUFs who sell agricultural land used for farming for ≥ 2 years.
Exemption if sale proceeds reinvested in agricultural land within 2 years (or 1 year prior to sale).
Exemption amount is lower of gain or investment.
If new land sold within 3 years, exemption is revoked proportionately. Must deposit gains under CGAS if reinvestment is delayed.

Offers exemption on LTCG from immovable property (land/building) by investing in government-backed capital gain bonds (e.g. NHAI, REC) within 6 months of sale.
Max annual investment ₹50 L. Exemption = lower of LTCG or invested amount. Bonds have 5‑year lock‑in. Failure to hold or lending on bonds revokes exemption.

Section	Purpose	Eligible Assessee	Reinvestment Asset	Time Limit	Lock-in
54D	Govt-acquired industrial property	Any person	Residential building on land acquired by Govt	3 years	3 years
54G	Shifting industrial undertaking to rural area	Any person	Land/building/plant & machinery	1 year prior or within 3 years	3 years
54GA	Shift industrial undertaking to SEZ	Any person	Land/building/plant & machinery in SEZ	Same	3 years
54GB	Reinvest gains into eligible start‑up company	Individual/HUF	Equity shares of SME/start‑up using proceeds to buy new machinery	Purchase before due date of the ITR or by company timeline	5 years (3 years for software/computers)

Exemption = (Capital gain × reinvested amount ÷ net sale consideration). CGAS applies in certain sections.

If unable to reinvest before tax‑return due date:
- Deposit unutilized capital gains into CGAS.
- Must utilize within relevant timelines (2 years for purchase, 3 years for construction) otherwise deposit amount becomes taxable in that year.

Indexation benefit removed on property LTCG: post‑July 23, 2024, taxpayers can choose between 12.5% without indexation or 20% with indexation, whichever is lower.
Section 87A rebate: Taxpayers with total taxable income ≤ ₹7 L including capital gains can claim rebate—even on STCG—but must claim manually in AY 2025‑26.
Proposed Income-tax Bill 2025 introduces ability to set off long‑term capital loss against short‑term gains (starting AY 2026‑27) — a significant shift.

Section	Asset Sold	Reinvestment Asset	Time Limit	Max Exemption	Lock-in / Revocation
54	Residential property	Residential property	1y before / 2y after or 3y construct	≤Gain or cost (≤₹10 Cr)	3y hold, else reversal
54F	Other long‑term assets	Residential property	Same as above	Proportionate (≤₹10 Cr)	3y hold; ownership limit
54B	Agricultural land	Replacement agricultural land	≤2y before/after	≤Gain or cost	3y hold, else reversal
54EC	Property	Specified bonds (NHAI/REC…)	≤6 months	≤Gain or ₹50 L	5y bond hold
54G/GA/GB	Industrial/startup assets	Shifting assets or equity in start‑ups	1y prior / 3y	Proportionate	3–5y hold depending on section

Plan holding period carefully: Only LTCG is eligible, and timelines matter.
Use CGAS if you can’t reinvest immediately.
Combine sections smartly: For instance, 54B + 54F if you sell both land and shares and reinvest across categories.
Mind the ₹10 crore cap on Sections 54 & 54F.
Always file Section 87A rebate manually for AY 2025‑26 if you’re eligible