Under section 82 of the Income-tax Act, 2025, the cost of a new residential house is reduced by the…

Section 82(1)(ii) of the Income-tax Act, 2025 provides that, where the exemption has been allowed, the cost of the new asset is reduced by the exempted capital gains for computing capital gains on its transfer within three years of its purchase or construction; where the gains exceeded the cost, section 82(1)(i) treats the cost as nil. The period is therefore "3 years". This corresponds to section 54 of the repealed Income-tax Act, 1961.