When Mr Rajan from Ambattur, Chennai sold his Noida property on July 9, 2019 for Rs 48 lakh, he made a long term capital gain of Rs 5.59 lakh. He then decided to buy a 1,851 sq.ft. land in Chennai for Rs 94.38 lakh to build his own house. To help with the Chennai land purchase, he took out a loan of Rs 49.85 lakh. Since he claimed Section 54 long term capital gains (LTCG) tax exemption, he didn't have to pay any tax on the sale of the Noida property. But then the Covid-19 lockdown hit in 2020, leading to a labour shortage that delayed the construction. The legal time limit of three years passed, and the house was still not completed. As a result, the Income Tax Department rejected his Section 54 tax exemption claim and demanded that he pay tax on the Noida property sale.