I have demolished my old residential house and given the plot for development to a developer to construct a residential complex out of which I will receive some apartments. Am I eligible for exemption?

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• I am getting the house constructed from builder/contractor. Am I eligible for exemption?

  Yes. The taxpayer himself may not be required to construct the house.

• I have sold my residential house and invested the entire proceeds in purchase of a new house from a builder for which an agreement to sale is registered. However, the builder has not given possession of the flat. Am I eligible for benefits?

  Yes. The key condition is utilization of sale proceeds for investment in a new residential house. If you could demonstrate that the delayed possession is beyond your control and you have paid substantial amounts to the builder, you are eligible for ...

• 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.

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

  In this case, you will not be eligible for exemption under section 54 of the Act.