Can I claim a tax exemption on both my house sale and share sale by buying a new home?

Many homebuyers upgrade to a bigger house by selling their existing property. At the same time, some also cash in on long-term investments such as shares to bridge the funding gap. But if both the property and the shares generate long-term capital gains (LTCG), can you claim tax exemption on both by investing in the same new house?

Today's Q&A explains such details in response to a query by a reader.

Since you are planning to sell the house and shares during the current financial year, the provisions of the Income Tax Act, 2025, which are similar to the provisions of the Income Tax Act, 1961, will apply.

The first provision is contained in Section 82, where long-term capital gains arising on sale of a residential house are exempted if the capital gains are invested in one residential house within a prescribed time period.

The prescribed time period is the same under both the provisions. If a ready-to-move-in house is proposed to be acquired, the same has to be done within two years from the date of sale of the house, whereas a longer period of three years from the date of sale is allowed within which the construction is required to be completed if one goes for self-construction of a house or an under-construction house is booked.

Even if a house has already been acquired within one year before sale of the house, the exemption is still available.

There is no restriction under the law which bars claiming exemption under both sections simultaneously in respect of the same residential house property. So you can claim exemption under Section 82 in respect of long-term capital gains arising on sale of the residential house as well as for long-term capital gains arising on sale of shares under Section 86 by investing the capital gains from sale of the residential house and the net sale proceeds from sale of shares in a single house property as long as the conditions prescribed are satisfied.

Please ensure you sell your existing house before you start selling the shares to be out of the condition of not owning more than one house on the date of sale of shares.