If the amount of Capital Gain does not exceed Rs 2 Cr, the assessee can purchase/construct two residential house properties This concession can be availed once in a life time.

2) The new residential house shall be purchased one year before or within two years after, the date of transfer of the residential property. Alternatively the assessee can construct a new residential property, construction of which should be completed within three years from the date of transfer of asset

3) Where the amount of capital gain is not appropriated or utilized by the assessee for purchase or construction of new residential house property before the due date of furnishing the return of income under section 139 (1) , it shall be deposited by him on or before the due date of furnishing return of income, in the Deposit Account in any branch of a public sector bank .

- Under the Income Tax Act , property is regarded as a capital asset and any gains arising from its sale is taxable as Capital Gains.

- Further, if the property is held for less than three years prior to its sale, it is termed as a short-term capital asset and any gain arising from the sale is treated as a short-term capital gain.

- Further, if the property is sold after a holding period of more than three years, it is to be treated as a long-term capital asset and a gain arising from its sale is assessed as long-term capital gains

- Further, as per Section 54 & 54 F  of the Income Tax Act, you can re-invest the long term capital gains amount in residential house property and claim an exemption therein.

- Further , no tax shall be paid , if you use the entire gain to buy another house within 2 years from the selling of your old property .

- Further, you can claim exemption on investment in two houses if the capital gain does not exceed Rs. 2 crore, and this benefit you can gain one in your life time. 

1. Yes

2. Investing in capital bonds

3. No

4. 2 years

A person wanted to shift his residence due to certain reason, hence, he sold his old house and from the sale proceeds he purchased another house. In this case the objective of the seller was not to earn income by sale of old house but to acquire another suitable house.
If in this case the seller was liable to pay income-tax on capital gains arising on sale of old house, then it would be a hardship on him. Section 54 gives relief from such a hardship. Section 54 gives relief to a taxpayer who sells his residential house and from the sale proceeds he acquires another residential house.

The benefit of section 54 is available only to an individual or HUF.
The asset transferred should be a long-term capital asset, being a residential house
property.
Within a period of one year before or two years after the date of transfer of old house, the taxpayer should acquire another residential house or should construct a residential house within a period of three years from the date of transfer of the old house.

With effect from Assessment Year 2021-22, the Finance Act, 2020 has amended Section 54 to extend the benefit of exemption in respect of investment made in two residential house properties. The exemption for investment made, by way of purchase or construction, in two residential house properties shall be available if the amount of long term capital gains does not exceed Rs. 2 crores. If assessee exercises this option, he shall not be entitled to exercise this option again for the same or any other assessment year.

Exemption under the above referred section of the IT act can be claimed by both equally.