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A home buyer can claim an exemption for long-term capital gains if (s)he invests the capital gains or sale proceeds of one property or other long-term asset to buy or construct another property within specified timelines.
However, such an exemption is not available if the construction is completed after three years.
This condition potentially penalises a home buyer for reasons beyond their control as there could be delay in construction for varied reasons, including Covid-19 lockdowns and restrictions.
It may therefore be considered to extend this period to 5 years or provide for exemption even in case construction is completed beyond 3 years, as also held in various judicial precedents.