Can I start the construction of a new residential house before I sell my existing house?

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• What is the time limit for construction of a new residential house from the time of sale of original house?

  In order to be eligible for the benefit under this section the NEW house must be constructed within a period of THREE years AFTER the sale of original asset.

• What is the time limit for investing the capital gains on sold residential property in a new property?

  For claiming exemption u/s54, the capital gains arising from sale of old property must be invested in: Purchase of another residential property within one year before or two years after the transfer of the old property. Construction on a residential ...

• What is the time limit for purchase of a new residential house from the time of sale of original house?

  In order to be eligible for the benefit under this section the NEW house must be purchased within a period of ONE year BEFORE or TWO years AFTER the sale of original asset.

• Is the exemption valid in case of residential house purchased outside India?

  No. The section specifically mentions that the new asset being a residential house must be acquired in India.

• Can I include the cost of the plot on which I am constructing a new house in computing exemption benefits?

  Yes. As per CBDT Circular 667 (dated 18.10.1993), the cost of the plot purchased for construction of a new house can be included for computation of benefits u/s 54 of the Act.