State with reasons as per the provisions of Income Tax Act, 1961, if following transactions are useful for the purpose of Tax Planning: (ii) Vasudevan sold his only residential house in the month of May 2020, on the sale

Yes, this transaction is useful for tax planning. There is an amendment in section 54 of the Income Tax Act, 1961, where any capital gain arising on sale of long-term residential house and capital gain does not exceed ₹2 crore, tax payer is allowed to invest in two residential houses in India (earlier it was allowed one house) and capital gain will be taxed accordingly. This option is given once in life time of tax payer. The deduction is allowed to individual/HUF on transfer of a long term residential property. Such person can purchase within one year before or two year after the date of transfer of such property or can construct the house property within 3 years. Therefore Mr. Vasudevan can purchase both the properties (situated in Noida as well as in Gurugram) and long term capital gain tax can be saved to the extent of amount spent for purchase of above said properties.