💰 Tax Savings · Capital-gains exemptions
Reinvest a house-sale gain in a startup/SME — Section 88 (old 54GB)
✍️ EaseValue Advisors · Updated 18 Jul 2026 · FY 2025-26
In short
Sell a residential property and subscribe equity of an eligible manufacturing SME or DPIIT start-up which then buys new plant & machinery — the gain is exempt under Section 88, Income-tax Act 2025 (old 54GB).
How it works
- Use the net sale consideration to subscribe more than 50% equity of an eligible company.
- The company must buy new plant & machinery within a year.
- Full exemption if the whole net consideration is so used (proportionate otherwise).
Lock-ins
Both the shares and the plant & machinery have holding conditions (typically 5 years) — sell early and the exemption reverses.
Who it helps
Founders funding their own manufacturing venture from a property sale.
Sequencing the reinvestment
- Subscribe >50% equity of the eligible company with the net sale consideration before the return due date.
- The company must buy new plant & machinery within a year.
- Hold both the shares and the plant for the lock-in (typically 5 years) or the exemption reverses.
The law behind it
Section 88 (old 54GB)
General information for FY 2025-26 (AY 2026-27), not advice on your specific case. Limits, rates and conditions
change with each Finance Act and depend on your facts — confirm before acting. © EaseValue Advisors LLP.
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