What is Section 54f of Income Tax Act?

The time limit to claim exemption under section 54F, the new residential property should be purchased before 1 year or after 2 years of the date of transfer, or constructed within 3 years from the date of transfer.

To claim an exemption under section 54F, you should be subject to the following conditions given below:

• A taxpayer should invest the net amount of the old property into a new residential property. 
• The new residential property must be purchased within 1 year or 2 years after the sale of assets, and must be constructed within 3 years of the sale of the old property. 
• The taxpayer should not hold more than one residential house on the date of sale to claim exemption under section 54F. 
• A taxpayer should not construct a house under 3 years from the date of transfer or purchase a house within 2 years. 
• If any of the conditions are broken or not followed by the taxpayer, then he or she will not get an exemption claim for capital gains for the relevant financial year. 

The maximum price for the new property purchase is INR 10 crore for the exemption calculation. If you purchase a property of more than 10 crore INR, then the amount will be only taken as INR 10 crore.