New Delhi, Aug. 2 -- A delay by a builder in handing over a residential property cannot, by itself, deprive a taxpayer of the capital gains exemption available under Section 54F of the Income-tax Act, the Telangana High Court has ruled.

In a judgment delivered on July 8, 2026, the High Court held that a taxpayer who has invested capital gains in acquiring a residential house cannot be denied the exemption merely because the builder failed to complete construction or transfer legal title within the prescribed three-year period. The court said Section 54F is a beneficial provision and must be interpreted in a manner that advances its objective of promoting investment in residential housing.

The ruling came in the case of Hyderabad residen...