About the Section 54 Exemption Calculator
What is the Section 54 Exemption Calculator?
Section 54 exempts long-term gains from selling a residential house if you reinvest them in another house in India. Section 54F offers a similar exemption for gains on any other long-term asset, but the whole net sale price must be reinvested for a full exemption.
This calculator applies the ₹10 crore cap on the reinvestment, the proportional rule of 54F and up to ₹50 lakh in 54EC bonds, and shows the gain still taxable.
How to use the Section 54 Exemption Calculator
- Asset Sold (sample: Residential house (Section 54))
- Long-Term Capital Gain (₹) (sample: 50,00,000)
- Net Sale Consideration (₹, for 54F) (sample: 90,00,000)
- Amount Invested in a New Residential House (₹) (sample: 40,00,000)
- Invested in 54EC Bonds within 6 Months (₹, land/building gains only, max ₹50 lakh) (sample: 0)
- Press Calculate Section 54 Exemption (results also refresh as you type). The result card shows the Capital Gains Exempt, along with Exempt through the new house, Exempt through 54EC bonds, Taxable LTCG remaining and Tax on the remaining gain (12.5% + cess).
Formula used
Section 54: Exempt = min(LTCG, Amount invested, ₹10 crore); Section 54F: Exempt = LTCG × Amount invested ÷ Net sale consideration
- 54EC = gain invested in NHAI, REC, PFC or IRFC bonds within 6 months, up to ₹50 lakh, for land or building gains
Buy the new house within 1 year before or 2 years after the sale, or construct it within 3 years.
Worked example
These are the sample values already filled in the calculator above, and the result it returns for them:
| Input | Sample value |
|---|---|
| Asset Sold | Residential house (Section 54) |
| Long-Term Capital Gain (₹) | 50,00,000 |
| Net Sale Consideration (₹, for 54F) | 90,00,000 |
| Amount Invested in a New Residential House (₹) | 40,00,000 |
| Invested in 54EC Bonds within 6 Months (₹, land/building gains only, max ₹50 lakh) | 0 |
| Result | Value |
|---|---|
| Capital Gains Exempt | ₹40,00,000 |
| Exempt through the new house | ₹40,00,000 |
| Exempt through 54EC bonds | ₹0 |
| Taxable LTCG remaining | ₹10,00,000 |
| Tax on the remaining gain (12.5% + cess) | ₹1,30,000 |
| Tax saved by the exemption | ₹5,20,000 |
Tips for using the Section 54 Exemption Calculator
- If you cannot buy before the ITR due date, deposit the amount in the Capital Gains Account Scheme to keep the exemption.
- Selling the new house within 3 years reverses the exemption.
- Under 54F you must not own more than one other residential house on the date of sale.