1. Yes he will get exemption under 54F of IT fact following all the terms of the section.
Exemption of Capital Gain on Transfer Of Long-Term Capital Assets in case of Investment In Residential House
In case an individual and HUF transfer any long-term capital asset (other than the residential house the income of which is taxable under the head ‘Income from house property’) and constructs a residential house within 3 years after the sale or purchases another residential house within one year before or two years after the sale, so much of capital gain shall be exempted as is in proportion of amount invested to net consideration.
Exemption u/s 54-F shall be allowed if following conditions are fulfilled.
(i) The assessee is only an individual or a H.U.F.
(ii) The assessee does not own more than one residential house on the date of transfer of the above mentioned assets.
(iii) The assessee transfers above mentioned asset or assets (other than a residential building) and there is a long term capital gain.
(iv) The assessee invests the net sale consideration of above mentioned assets to construct a residential house within 3 year of the sale of the asset or purchases an already built house within one year before or two years after the sale of the above mentioned asset.
(v) The assessee is required not to purchase another residential house with in a period of one year after or constructs within a period of 3 year after the date of transfer of the above mentioned asset/assets.
2. Three years.
ACIT Vs. Sh. Vineet Kumar Kapila (ITAT Delhi)
ITAT held that booking of flat with the builder has to be treated as construction of flat by the assessee and hence period of three years would apply for construction of new house from the date of transfer of long term capital asset