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Benefit of capital gain exemption for two Houses in Budget 2019
An individual can declare two houses as self-occupied instead of just one earlier. Also, on selling a house property, a taxpayer can invest the proceeds in two houses and still get the long term capital gains (LTCG) tax benefit.
Earlier, the benefit was available for only one house.
The changes in the tax laws benefit families who want to sell one big property and buy two separate houses to settle children or during the partition of the family assets. Two properties can be in different cities but it has to be in India.
It also benefits individuals who live in metro such as Mumbai, Chennai, Kolkata and Delhi where property prices are much higher compared to the rest of the country.
Many ancestral bungalow & property owners also sell their houses to a developer for construction of a building. In return, the developer gives them two apartments. Such property owners will also get the tax benefit.
The other conditions to get the tax benefit remain the same as earlier. The house sold must be a long-term capital asses i.e., holding period of over 2 years.
The seller needs to purchase a residential house either 1 year before the date of sale/transfer or 2 years after the date of sale/transfer or construct the residential house within 3 years from the date of sale/transfer.
An individual can sell multiple houses and invest the gains in now two properties to get the tax benefit under section 54.