Capital Gains — Exemptions

Save Capital Gains Tax: Section 54 vs 54EC Bonds vs 54F + CGAS

Q: Which 54EC bonds are available now?

REC, PFC, IRFC and HUDCO (~5.25%, 5-year lock-in). NHAI stopped issuing 54EC bonds in 2022 — invest within 6 months of sale, ₹50L/year cap.

Q: What is the Section 54 exemption limit?

Invest LTCG from a house into another house (buy within 1-before/2-after years, construct within 3) — capped at ₹10 crore.

Q: What is the 54F trap?

Exemption is proportional to consideration reinvested — invest half the sale price, save half the tax. And you must own at most one house.

Q: What is CGAS?

Capital Gains Account Scheme: deposit gains before the ITR due date to preserve 54/54F exemption while house-hunting; unused money gets taxed after 2–3 years.

54: house gains → another house (₹10cr cap). 54EC: land/building gains → REC/PFC/IRFC/HUDCO bonds, ₹50L, 6 months (NHAI closed!). 54F: any asset → house, full-consideration trap. CGAS: park money by ITR due date.

54 vs 54EC vs 54F vs 54B

	54 (house → house)	54EC (bonds)	54F (any → house)
Qualifying gain	LTCG on residential house	LTCG on land/building only	LTCG on any non-house asset
Invest where	1 house: buy 1yr-before/2yr-after, construct 3yr	REC/PFC/IRFC/HUDCO bonds in 6 months	1 house, same timelines
Cap	₹10 cr	₹50L/FY, 5-yr lock, ~5.25% taxable interest	₹10 cr + must own ≤1 house
Trap	New house sold <3yr → exemption reverses	Sold/loan vs bonds <5yr → exemption reverses	Exemption ∝ consideration invested — invest half, save half

CGAS: can't decide before the ITR due date? Deposit gains in a Capital Gains Account by then (not the belated date!) and use within 2/3 years — unutilised gets taxed.
54B: urban agricultural land → buy other agri land within 2 years. Rural agri land isn't even a capital asset — zero tax, no exemption needed.
Still need CII? Only for the transitional 20%-with-indexation option on pre-23-Jul-2024 property — all new transfers are flat 12.5%.

CG rates + holding periods → · Buying? 194-IA TDS side →

💡 Pro tip: the once-in-a-lifetime TWO-house option

Selling a house with gains up to ₹2cr? Sec 54 lets you buy TWO houses instead of one — but only ONCE in your lifetime. Use it on a ₹40L gain and the option is gone forever; save it for the big ancestral-property sale. Can't decide before 31 July? Park the gains in a CGAS account before the filing deadline to hold the exemption while you hunt. And 54F (any asset → house) demands you own ≤1 house — check that condition first, it kills most 54F claims.

By TaxSetu Editorial Team · Last reviewed: 7 October 2026

Based on the Income-tax Act 2025, Income Tax Rules 2026 and CBDT notifications; sections per the Income-tax Act 1961 (as amended) with 2025-Act mappings where notified · Verify on the official portal: incometax.gov.in

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Frequently Asked Questions

Which 54EC bonds are available now?+

REC, PFC, IRFC and HUDCO (~5.25%, 5-year lock-in). NHAI stopped issuing 54EC bonds in 2022 — invest within 6 months of sale, ₹50L/year cap.

What is the Section 54 exemption limit?+

Invest LTCG from a house into another house (buy within 1-before/2-after years, construct within 3) — capped at ₹10 crore.

What is the 54F trap?+

Exemption is proportional to consideration reinvested — invest half the sale price, save half the tax. And you must own at most one house.

What is CGAS?+

Capital Gains Account Scheme: deposit gains before the ITR due date to preserve 54/54F exemption while house-hunting; unused money gets taxed after 2–3 years.