|Long term capital gain arising from capital asset transferred:
Capital gain exemption
|As per Sec. 54, Individual/HUF can claim exemption if the amount of capital gain is invested
* Amount of exemption shall be equal to the amount invested or capital gain, whichever is lower.
|Any capital asset
|As per Sec. 54EC, any person can claim exemption if assessee has invested the amount of capital gain in bonds issued by
within 6 months from the date of transfer of original asset.
|An assessee is allowed to invest maximum Rs 50,00,000 in one financial year.
|Residential House or Plot
|Any capital asset except residential house
|As per Sec 54F, Assessee must comply with all the conditions stated as per Sec 54 under capital gain exemption.
Please note that investment must be made in residential house property.
|Assessee should not have more than 1 house in his name on the date of transfer besides the house which is being purchased.
|Shifting of the industrial undertaking from urban area to any other area
|As per Sec. 54G, exemption is allowed to all if
which belong to an industrial undertaking shifted from urban area to any other area.
The amount must be invested within 1 year before or 3 years after the date of transfer of the original asset.
|6.Agriculture land in the urban area
|As per Sec. 54 B, exemption is allowed to individual/HUF if
The exemption is allowed if the assessee has purchased one or more agriculture land within a period of 2 years after the date of transfer of the original land and it can be purchased in rural area or urban area.
Important points to remember
- As per Sec. 54, 54B & 54F, assessee can avail the exemption if he has invested the amount in specified capital asset up to last date of filing return of income otherwise amount should be deposited in Capital Gain Account Scheme by opening an account with nationalized bank or post office.
- The amount invested in the capital account scheme should be withdrawn for making investment within the specified time period, otherwise the unutilized amount shall be considered long term capital gain of the year in which time period has expired.
- As per Sec. 54,54EC,54F, 54G & 54B, the capital asset purchased or constructed must not be transferred for a period of at least 3 years otherwise exemption allowed earlier shall be withdrawn.
- If assessee has invested the amount of capital gain in the new house from his bank account and title deed contains the name of spouse, exemption from long term capital gain will be allowed as decided by the case of Ravinder Kumar Arora Vs Commissioner of Income Tax.
- There is no compulsion on assessee to invest the amount received from sale of house property, he can use other cash & cash equivalent held by him to invest in new house property.