The government on Wednesday imposed a limit of 10 crore for deduction on long-term capital gain tax for reinvestment in residential properties under Section 54 and 54F of the Income Tax Act.
These two sections deal with reinvestment of proceeds from sale of long-term assets (housing or other capital assets) to buy residential properties.
“For better targeting of tax concessions and exemptions, I propose to cap deduction from capital gains on investment in residential houses under sections 54 and 54F to ?10 crore,” Finance Minister Nirmala Sitharaman said in her budget speech.