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Interim Budget 2019: You can invest capital gains in two houses to save tax

FM Piyush Goyal proposed changes to Sec 54 of Income Tax Act with a caveat capping capital gains to Rs 2 crore; until now, a taxpayer was given relief only on one house

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Last Updated : Feb 01 2019 | 4:20 PM IST

If a father sells a big house to buy two smaller ones for his children, until now, he could claim long-term capital gains tax benefit on only one of the two properties. Under Section 54 of the Income-Tax Act, long-term capital gains (LTCG) benefit could be availed only on one residential property located in India.

The Budget has now allowed residential property sellers to get the capital gains benefit when they invest the proceed from the sale of one house into two residences. The only caveat is that the total capital gains have to be up to Rs 2 crore.

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