I Have sold an old property which has attracted LTCG tax in tune of 40 lacs.
Can I invest this amount in buying 2 residential properties to save on tax and also if i invest 25 lacs in one and 10 lacs in the other and balance 5 lacs next year as the part of installment,is it acceptable?
You didn't mention the type of your "OLD" property.
If it is a "Residential - House/Flat" property, then you can invest the amount in buying two residential properties.
Regarding the installment:
You have to invest the remaining amount before filing your return of income:
If you sold the property before 31.March.2012 then before filing your return for AY 2012-13 on or before July 31,2012:
or if you sold the property after 31.March.2012 then before filing your return for AY 2013-14 July 31,2013.
If not, you need to invest the remaining amount in Capital Gains Savings Bonds and then withdraw at any time required for utilizing in acquisition of property.
Refer: LTCG Deduction