Can taxpayers claim I-T exemption in sale of redeveloped flats? What ITAT Tax Appellate Tribunal ruled

3 min readJul 27, 2026 03:48 PM IST Section 54F of the I-T Act allows individuals to avoid tax on long-term capital gains. (File photo for representation)Can sale of your redeveloped old flat be counted as a long term gain under Income Tax Act, 1961, entitling you – as a taxpayer – for indexation benefits and exemption under Section 54F of the Income-Tax (I-T) Act, 1961? Yes, as the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) recently held that capital gains arising from the sale of a flat, received under a redevelopment scheme, are long-term capital gains, qualifying the taxpayer for tax exemption. What does exemption under Section 54F mean for taxpayers?Section 54F of the I-T Act allows individuals to avoid tax on long-term capital gains if they reinvest the residential hous