This was Section 54 under the Income-tax Act 1961. See the mapping
Capital gains
Section 82, Income-tax Act 2025: Profit on sale of property used for residence
Plain-English summary
This is the exemption everyone still calls Section 54: sell a residential house you have held for more than two years, put the long-term gain into another residential house in India, and that gain is not taxed. You have one year before the sale or two years after it to buy, or three years to build. Money you have not spent by the return due date goes into a Capital Gains Account Scheme deposit to hold the exemption. The 2025 Act renumbers Section 54 as Section 82 and keeps every rule intact: the once-only option to split a gain of up to ₹2 crore across two houses, the ₹10 crore ceiling on the exemption, and the clawback if you sell the new house within three years. It works on both the old and new tax regimes.
What changed when Section 54 became Section 82?
The address, not the exemption. The rule that lets you roll a house-sale gain into a new house lived in Section 54 of the Income-tax Act 1961 and now sits in Section 82 of the Income-tax Act 2025, titled "Profit on sale of property used for residence". Every number a seller cares about carried over untouched: the one-year-before and two-year-after purchase window, the three-year construction window, the ₹2 crore two-house option, the ₹10 crore ceiling and the three-year clawback.
The new Act tidies the drafting into eight subsections and swaps the old labels for the new ones. It says "tax year" where the 1961 Act split "previous year" and "assessment year". The deposit deadline that used to point at Section 139(1) now points at Section 263(1), the new return-filing section. Unused deposits are brought back to tax under Section 67, the new capital-gains charging section, in place of the old Section 45. The result reads more cleanly, but a seller who knew Section 54 already knows Section 82.
The 2025-Act number (82) and its title are cross-checked against multiple published copies of the enacted Act.†
Who can claim the Section 82 exemption?
Only individuals and Hindu Undivided Families, and only when the asset sold is a long-term residential house. Companies, firms and LLPs are shut out, and so is a plot of bare land or a commercial shop (a gain on those may still qualify under the sister exemptions below).
Four gates decide whether your sale qualifies:
- You are an individual or an HUF. There is no lower or upper age limit and residents and non-residents both qualify, so an NRI selling an Indian house can claim it too.
- What you sold is a residential house, meaning a building or land appurtenant to it whose income is (or would be) taxed under house property. Income actually earned from it is not required, so a house you lived in yourself counts.
- The house was long-term: held for more than 24 months (2 years) before the sale. A house sold inside 24 months gives a short-term gain, which Section 82 cannot shelter.
- The new house is in India. A house bought or built abroad has not qualified since April 2015, so overseas property is out.
You may claim Section 82 on every qualifying sale in your life; there is no once-in-a-lifetime limit on the exemption itself. Only the option to split one gain across two houses is once-only.
How the reinvestment window works: buy or build
Buying and building run on two different clocks, and both are measured from the date you transfer the old house. To buy, you have a window that opens one year before the sale and closes two years after it. To construct, you have three years after the sale to complete the house. The one-year-before leg only helps a purchase: you cannot start building before you have sold.
What matters is that the money lands in a house inside the window, not where the money came from. Unlike its sister Section 86 (the old 54F), Section 82 does not force you to reinvest the exact sale proceeds, so you can fund the new house with a home loan and still shelter the gain, as long as a house is bought or built in time. Delays are the usual trap: a builder who hands over an under-construction flat late can push you past the three-year line, and courts have been sympathetic where the buyer paid on time but the developer slipped, though you cannot rely on that.
How much is exempt, and the ₹10 crore ceiling
The exemption is the lower of your long-term capital gain and what you put into the new house. Reinvest an amount at least equal to the gain and the whole gain escapes tax. Reinvest less and only that much is exempt; the shortfall is taxed at the long-term rate. So a ₹80 lakh gain fully sheltered by a ₹90 lakh house pays nothing, while the same gain against a ₹60 lakh house leaves ₹20 lakh taxable.
Since FY 2023-24 a ceiling caps the benefit. If the cost of the new house runs above ₹10 crore, the amount over ₹10 crore is ignored when working out the exemption, so the most any single sale can shelter is ₹10 crore of gain. The same ₹10 crore limit applies to what you may park in the Capital Gains Account Scheme. The cap bites only on very large sales, but for those it is a hard line.
| Your position | What is exempt | What is taxed |
|---|---|---|
| New house costs at least the gain | The whole long-term gain | Nothing |
| New house costs less than the gain | The amount reinvested | Gain minus the amount reinvested |
| Gain (or new house) above ₹10 crore | Capped at ₹10 crore | Everything above the ₹10 crore ceiling |
| Nothing reinvested and no CGAS deposit | Nil | The entire long-term gain |
The once-only option to buy two houses
Normally the exemption asks you to reinvest in one house. A one-time relaxation lets you split the gain across two houses instead, but only when the long-term gain on the sale does not exceed ₹2 crore. Buy or build two houses inside the usual windows and both count toward the exemption.
The catch is in the name of the relief: it is once in a lifetime. Once you exercise the two-house option for any tax year, you cannot use it again for that year or any later year. Reserve it for the sale where it genuinely helps, for example when you want to house two children or hold one home and let the other. If your gain is above ₹2 crore, the option is not available at all and you are back to a single house.
The ₹2 crore two-house option was introduced for the old Section 54 by the Finance Act 2019 and carries into Section 82 unchanged.
Parking money in the Capital Gains Account Scheme
The windows are generous, but the tax return comes first. Your return for the sale year is due long before three years are up, so the law asks you to show your intent by then: any part of the gain you have not already spent on the new house must be deposited in a Capital Gains Account Scheme (CGAS) account with a bank, on or before the due date for filing the return under Section 263(1). Claim the exemption in the return on the strength of that deposit, then draw the money out as you pay the builder or seller.
The deposit is a placeholder, not the finish line. You still have to actually buy or build within the two or three-year window. Whatever is left unspent in the account when the three years expire is taxed as a long-term capital gain of that later year, under Section 67. So the CGAS buys you time, but it does not forgive money you never reinvest.
Deposit by the Section 263(1) due date, not the extended date some late filers get; miss it and the unspent gain is taxable in the sale year itself.
Traps: selling within 3 years, unspent CGAS money, builder delays, foreign property
The exemption is conditional, and four moves undo it:
- Selling the new house within 3 years of buying or building it. The exemption you claimed is stripped out of the new house's cost of acquisition (it can fall to nil), so the gain on that second sale swells by the amount you had sheltered. Sold within 24 months, that enlarged gain is short-term and taxed at your slab rate; sold between 24 and 36 months, it is long-term and taxed at 12.5%. The cost reduction applies either way.
- Leaving CGAS money unspent. Anything still in the account when the three-year window closes is taxed as a long-term gain of that year, even though you claimed the exemption earlier.
- Missing the window through a builder delay. Construction not completed within three years can cost the exemption; departmental practice is stricter than some court rulings, so treat the deadline as firm.
- Reinvesting abroad. A house outside India has not qualified since April 2015. The new house must be in India.
Section 82 (old 54) vs Section 86 (old 54F): which one is yours?
People mix these up constantly, and picking the wrong one is expensive. Section 82 is for selling a residential house; Section 86 (the old Section 54F) is for selling any other long-term asset, such as shares, gold or a plot of land, and buying a house with the proceeds. The conditions differ in ways that change how much you must reinvest.
| Feature | Section 82 (old 54) | Section 86 (old 54F) |
|---|---|---|
| What you sold | A residential house | Any long-term asset except a house |
| What you must reinvest | Only the capital gain | The whole net sale consideration |
| If you reinvest part | Exempt in proportion to the gain reinvested | Exempt in proportion to the net consideration reinvested |
| Two-house option | Yes, once, if gain ≤ ₹2 crore | No, one house only |
| Other houses you may own | No restriction | You must not own more than one other house on the sale date |
| ₹10 crore ceiling | Yes | Yes |
Sell shares and buy a house, and it is Section 86 you want, with its heavier reinvest-the-whole-consideration test. Sell a house and buy a house, and it is Section 82.
Where the other capital-gains rollovers moved
Section 54 was one of a family of reinvestment exemptions, and the 2025 Act renumbered the whole family in order. If your sale is not a plain house-to-house case, the row you need may be one of these:
| Old section | New section | What it exempts |
|---|---|---|
| 54 | 82 | Residential house sold, reinvested in another house |
| 54B | 83 | Agricultural land reinvested in agricultural land |
| 54D | 84 | Compulsory acquisition of industrial land or building |
| 54EC | 85 | Gain on land or building put into notified bonds (up to ₹50 lakh) |
| 54F | 86 | Any other long-term asset, reinvested in one house |
Section numbers for the sister exemptions cross-checked against published copies of the enacted Act.†
Does the tax regime change any of this?
No. Section 82 sits in the capital-gains machinery, not in the deductions that the new regime switches off, so the exemption is available whether you are on the old regime or the default new one. Choosing the new regime does not cost you this relief.
The regime does not change the rate on whatever gain is left taxable either. A long-term gain on a house is charged under Section 197's structure at 12.5% without indexation for sales on or after 23 July 2024. A resident individual or HUF who bought the house before that date may instead choose the old 20% rate with indexation if it works out lower. That choice affects only the taxable slice; the part you shelter under Section 82 is out of tax regardless.
The 12.5%-without-indexation versus 20%-with-indexation choice applies only to land and building bought before 23 July 2024, and only for resident individuals and HUFs.†
Should you use Section 82, and how to plan the sale?
Use it whenever you are genuinely moving from one home to another, because it turns a taxable event into a tax-free one for the price of paperwork. The planning is about timing and about what to do with a gain you cannot fully reinvest.
Time the sale to the window, not the other way round. If you have already found the new house, remember the one-year-before leg: buying up to 12 months ahead of the sale still qualifies, which is useful in a rising market. If you are building, budget for slippage, because the three-year construction line is the most common way people lose the relief.
For a gain you cannot or do not want to sink fully into a house, Section 85 (the old 54EC) is the natural top-up: up to ₹50 lakh of a land-or-building gain invested in notified bonds such as those from REC or PFC within six months buys a further exemption, and the two can be stacked. And if a large gain runs past the ₹10 crore ceiling, accept that the excess is taxable and plan the cash for it rather than over-reinvesting in property you do not need. When in doubt, park the money in a CGAS account by the return due date; that keeps every option open for up to three years while you decide.
Worked examples
₹80 lakh gain against a ₹90 lakh house, then a ₹60 lakh one
Anil sells a flat in June 2026 for a long-term gain of ₹80,00,000 and buys a ready house for ₹90,00,000 in March 2027, inside the two-year window. Because the new house costs more than the gain, the whole ₹80,00,000 is exempt and he pays nothing. Had he bought a smaller house for ₹60,00,000 instead, only ₹60,00,000 would be exempt and the leftover ₹20,00,000 would be taxed at 12.5% (assuming his other income already uses up the basic exemption), which is ₹2,50,000, plus 4% cess of ₹10,000, so ₹2,60,000 in all.
₹1 crore in CGAS, ₹30 lakh left unspent
Meera has a long-term house gain of ₹1,00,00,000 in 2026 but has not found a new home by the time her return is due. She deposits the full ₹1,00,00,000 in a CGAS account before the Section 263(1) due date and claims the exemption. Over the next three years she builds a house using ₹70,00,000 and leaves ₹30,00,000 in the account. When the three years expire, that unspent ₹30,00,000 is taxed as a long-term gain of that year under Section 67 (assuming her other income already uses up the basic exemption): 12.5% is ₹3,75,000, plus ₹15,000 cess, so ₹3,90,000.
A gain above the ₹10 crore ceiling
A family sells an old bungalow for a long-term gain of ₹14,00,00,000 and buys a new house for ₹15,00,00,000. The ₹10 crore ceiling caps the reinvestment that counts, so the exemption is limited to ₹10,00,00,000 and the remaining ₹4,00,00,000 is taxed at 12.5%: ₹50,00,000, plus a 15% surcharge of ₹7,50,000 (the surcharge on long-term gains is capped at 15%), plus 4% cess of ₹2,30,000, giving ₹59,80,000. Spending more than ₹10 crore on the house does not raise the exemption.
Read the section as enacted
The statutory text is loaded verbatim from the Gazette copy of the Income-tax Act 2025, never from secondary sources or memory. The CA-checked copy appears here the moment it clears review.
Section 82 FAQs
Can I claim Section 82 if I buy the new house in my spouse's or child's name?
Safest is to buy it in your own name. The law says the assessee must purchase or construct the house, and while some courts have allowed a spouse's or child's name where the seller funded the purchase, the tax department often disputes it. If you want certainty, keep the new house in the name of the person who sold the old one, or at least add them as a co-owner.
Does buying an under-construction flat count as a purchase or as construction?
Generally as construction, which gives you the longer three-year window rather than two, timed from the sale of the old house. The risk is that the three years run from your sale date, not from when the builder promised possession, so a delayed project can breach the limit. Track the deadline yourself and push the developer; do not assume a completion certificate arriving late will be excused.
How many times can I use the Section 82 exemption?
As often as you have qualifying sales. There is no once-in-a-lifetime cap on the exemption itself, so you can claim it on a house sale in 2026 and again on another in 2031. The only once-only feature is the option to split a single gain of up to ₹2 crore across two houses; use that and you cannot use it again.
What happens if I sell the new house within three years?
The exemption is clawed back. When you sell the new house inside three years of buying or building it, the gain you had sheltered is subtracted from that house's cost of acquisition, so the taxable gain on the second sale is larger by roughly the amount you saved. The cost reduction applies whenever you sell inside three years; only the rate on the enlarged gain turns on how long you held it. Sell within 24 months and that gain is short-term at your slab rate, which can be steeper than the long-term rate you avoided; sell between 24 and 36 months and it is long-term at 12.5%.
Can an NRI claim the Section 82 exemption?
Yes. The exemption is open to individuals and HUFs regardless of residential status, so a non-resident selling a residential house in India and reinvesting in another Indian house can claim it on the same terms. The new house must be in India. Watch the separate TDS mechanics on an NRI property sale, which are about withholding, not about whether the exemption applies.
Is the exemption available under the new tax regime?
Yes. Section 82 is part of the capital-gains rules, not one of the Chapter VIII deductions the new regime removes, so it works on both the old and the default new regime. Choosing the new regime does not cost you this relief.
Can I fund the new house with a home loan and still claim the exemption?
Yes. Section 82 does not require you to reinvest the exact sale money, only that a house is bought or built inside the window, so a loan-funded purchase qualifies. This is a real difference from Section 86 (the old 54F), which is stricter about reinvesting the net consideration. You can also claim the usual home-loan interest and principal benefits on the new loan on the old regime.
What is the last date to deposit unused money in the Capital Gains Account Scheme?
On or before the due date for filing your return of income for the sale year under Section 263(1), which for most individuals is 31 July after the tax year ends. Deposit the unspent gain by then and you keep the exemption while you take up to two or three years to buy or build. Miss that date and the unspent gain is taxed in the sale year.