Section 54F → Section 86

Exemption on long-term capital gain from any asset other than a residential house, when net consideration is invested in a residential house

New reference Section 86

Income-tax Act, 1961Section 54F

Individual or HUF; original asset any long-term asset other than a residential house
Exemption proportionate to net sale consideration invested
Must not own more than one house (other than the new one) on the date of transfer
Investment capped at ₹10 crore
Same purchase/construction windows as section 54

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 86

Same exemption, now section 86
Proportionate formula, ownership condition and ₹10 crore cap carried over
Withdrawal if another house is bought within 2 years or constructed within 3 years, or the new house is sold within 3 years
Capital Gains Accounts Scheme route continues

Applies from tax year 2026-27 (from 1 April 2026).

What changed

No substantive change reported. The computation method, documentation and compliance approach under 54F carry over to section 86.

Practice notes

Commonly relevant for sale of shares, mutual funds, land or foreign shares where proceeds go into a house.
Remember: the whole net consideration, not just the gain, must be invested for full exemption.

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Related sections

54→82Exemption on long-term capital gain from sale of a residential house reinvested in another residential house 139→263Return of income: original, belated, revised, updated and defective returns