“Exemptions from Total Income”

Incomes, or classes of income, or persons or classes of persons, enumerated below, shall be exempt from tax, subject to the conditions and to the extent specified hereunder: 

. . .

 [(114AA)Any income chargeable under the head "capital gains" derived by a resident individual from the sale of constructed residential property:

Provided that exemption under this clause shall only apply, if -

(a) at the time of sale, the residential property was being used for the purpose of personal accommodation by the resident individual, his spouse or dependents and for which any of the utility bills is issued in the name of such individual;

(b)the land area of the property does not exceed 500 square yards in case of a house and 4000 square feet in case of a flat; and

(c)exemption under this clause has not previously been availed by the individual, his spouse or dependents]

Source

Income Tax Ordinance 2001, The Second Schedule, Part I, Clause 114AA.