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Provisions of Sections 54, 54B, 54D, 54EC, 54F, 54G, 54GA and 54H

Q1. Who can claim exemption under these Sections ?

Section-54 : Individual /Hindu undivided family

Section-54B : Individual /Hindu undivided family

Section-54D : Any person

Section-54EC : Any person

Section-54F : Individual /Hindu undivided family

Section-54G : Any person

Section-54GA : Any person

Q2. Which capital asset — Short-Term or Long-Term is eligible for Exemption ?

Section-54 : Long-Term

Section-54B : Long-Term / Short-Term

Section-54D : Long-Term / Short-Term

Section-54EC : Long-Term

Section-54F : Long-Term

Section-54G : Long-Term / Short-Term

Section-54GA : Long-Term / Short-Term

Q3. Which Specific Asset is eligible for Exemption

Section-54 : A Residential House Property

Section-54B : 

Agricultural land if it was used by the individual or his parents for agricultural purposes for at least 2 years immediately prior to transfer

Section-54D : 

Land or building forming part of an industrial undertaking which is compulsorily acquired by the Government and which is used for 2 years for industrial purposes prior to its acquisition

Section-54EC : Any long-term capital asset

Section-54F : 

Any long- term capital asset (other than a residential house property) provided on the date of transfer the taxpayer does not own more than one residential house property’ (except the new house as stated in 4 infra).

Section-54G : 

Land, building plant or machinery in order to shift an industrial undertaking from urban area to rural area.

Section-54GA : 

Land, building, plant or machinery in order to shift an Industrial undertaking from urban area to any special economic zone

Q4. Which asset the taxpayer should acquire to get the benefit of exemption ?

Section-54 : 

Only 1 residential house in India (prior to the assessment year 2015-16 A residential house property)

Section-54B : Agricultural land (maybe in rural area or urban area)

Section-54D : Land or building for industrial purposes

Section-54EC : 

Bonds of National Highways Authority of India or Rural Electrification Corpn. (investment Cannot exceed Rs. 50 lakh in current year and next year)

Section-54F : 

Only 1 residential house in India (prior to the assessment year 2015-16 ; A residential house property)

Section-54G : 

Land, building plant or machinery in order to shift an undertaking to rural area

Section-54GA : 

Land, building, plant or machinery in order to shift an undertaking to any special economic zone

Q5. What is Time-Limit for acquiring the New Asset ?

Section-54 : 

Purchase: 1 year backward or 2 years forward Construction:3 years forward

Section-54B : 2 years forward

Section-54D : 3 years forward

Section-54EC : 6 months forward

Section-54F : 

Purchase: 1 year backward or 2 years forward Construction: 3 years forward

Section-54G : 1 year back war or 3 years forward

Section-54GA : 1 year backward or 3 years forward

Q6. From which date the time-limit shall be determined

Section-54 : 

From the date of transfer of house property but in case of compulsory acquisition from the date of receipt of compensation.

Section-54B : From the date of transfer of agricultural land

Section-54D : From the date of receipt of compensation

Section-54EC : 

From the date of transfer of long-term capital asset but in the case of compulsory acquisition from the date of receipt of compensation.

Section-54F : 

From the date of transfer of capital asset but in case of compulsory acquisition from the date of receipt of compensation

Section-54G : From the date of transfer

Section-54GA : From the date of transfer

 

Q7. How much is exempt

Section-54 : Investment in the new asset or capital gain , which ever is lower

Section-54B : Investment in the new asset or capital gain , which ever is lower

Section-54D : Investment in the new asset or capital gain , which ever is lower

Section-54EC : Investment in the new asset or capital gain , which ever is lower

Section-54F : Investment in the new asset / net sale consideration X capital gain

Section-54G : Investment in the new asset or capital gain , which ever is lower

Section-54GA : Investment in the new asset or capital gain , which ever is lower

Q8. Is it possible to revoke the exemption in a subsequent year

Section-54 : If the new asset is transferred within 3 years of its acquisition

Section-54B : If the new asset is transferred within 3 years of its acquisition

Section-54D : If the new asset is transferred within 3 years of its acquisition

Section-54EC : 

If the new asset is transferred or it is converted into money or a loan is taken on security of the new asset within 3 years of its acquisition

Section-54F :

(a) if the new asset is transferred within 3 years of tis acquisition , (b) If another residential house is purchased within 2 years of transfer of original asset, or (c) If another residential house is constructed within 3 years of the transfer of original asset.

Section-54G : If the new asset is transferred within 3 years of its acquisition

Section-54GA : If the new asset is transferred within 3 years of its acquisition

Q9. When the exemption is revoked it is taxable in the year in which the default is committed. What will be status of the notional income 

Section-54 : Short-term Capital Gain

Section-54B : Short-term Capital Gain

Section-54D : Short-term Capital Gain

Section-54EC : Long-term Capital Gain

Section-54F : Long-term Capital Gain

Section-54G : Short-term Capital Gain

Section-54GA : Short-term Capital Gain

Q10. Whether scheme of deposit is applicable

Section-54 : Yes

Section-54B : Yes

Section-54D : Yes

Section-54EC : No

Section-54F : Yes

Section-54G : Yes

Section-54GA : Yes

Q11. What is the Scheme of Deposit of Sections 54, 54B, 54D, 54EC, 54E 54G, 54GA and 54H

Scheme of deposit –

if the new asset is not acquired up to the due date of submission of return of income, then the taxpayer will have to deposit the money in “Capital Gain Deposit Account Scheme” with a nationalised bank. The proof of deposit should be submitted along with return of income. On the basis of actual investment and the amount deposited in the deposit account, exemption will be given to the taxpayer.

The taxpayer can acquire a new asset by withdrawing from the deposit account. But the new asset should be acquired within the time-limit. If the deposit account is not fully utilised for acquiring the new asset, the unutilised amount [but in case of section 54F it is unutilised amount/net sale consideration X capital gain] will become chargeable to tax in the previous year in which the specified time-limit expires [in case of sections 54 and 54F when the 3 year time limit expires]. It will be taxable as short-term/long-term capital gain depending upon the original capital gain. The unutilised amount can be withdrawn by the taxpayer after the expiry of the aforesaid time-limit.

 



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