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Exempted Incomes (Tax-FREE): Section-10(37),Section-10(38),Section-10(39), Section-10(40),Section-10(41)

 

77. Capital Gain on compulsory acquisition of urban Agricultural Land [Section 10(37)]

In the case of an assessee, being an individual or a Hindu individual family, any income chargeable under the head” Capital gain” arising from the transfer of agricultural land, shall be exempted, where :

  1. Such land is situate in any area referred to in, item (a) or item (b) of sub-clause (iii) of clause (14) of Section 2

  2. Such land, during the period of two years immediately preceding the date of transfer, was being used for agricultural purposes by such Hindu undivided family or individual, or a parent of his

  3. Such transfer is by way of compulsory acquisition under any law, or a transfer the consideration for which is determined or approved by the Central Government or the Reserve Bank of India

  4. Such income has arisen from the compensation or consideration for such transfer received by such assesses on or after the 1st day of April, 2004.

It may be noted in this connection that exemption is available only if compulsory acquisition has taken place on or after 1-4-2004. Exemption is also available if acquisition has taken place before 1-4-2004 but compensation has been received on or after 1-4-2004.

For the purposes of this clause, the expression, compensation or consideration” includes the compensation or consideration enhanced or further enhanced by any court, tribunal or other authority.

78. Long Term Capital Gain on transfer of shares and securities covered under Security Transaction Tax (STT) [Section 10(38)]

Long-term capital gains arising on transfer of securities are not chargeable to tax in the hands of any person, if following conditions are satisfied :

 

1.         The asset transferred should be equity shares of a company or units of an equity oriented mutual fund or a unit of a business trust.

 

2.         The transaction should be liable to securities transaction tax, at the time of transfer.

 

3.         Such asset should be a long-term capital asset.

 

4.         Transfer should have taken place on or after October 1, 2004.

Equity oriented mutual fund means a mutual fund specified under section 10(23D) and 65% of its investible funds, out of total proceeds are invested in equity shares of a domestic company.

 

Note:

(1)       With effect from 1-4-2016, exemption from capital gains under Section 10(38) shall be available even in respect of long-term capital gains arising from transfer of units of a business trust which were acquired in lieu of shares of special purpose vehicle as referred to in section 47(xvii) and on which securities transaction tax has been paid.

 

(2)       Exemption from long term capital gains under section 10(38) shall be available w.e.f April 1, 2017 even where STT is not paid, provided that -

 

-           transaction is undertaken on a recognised stock exchange located in any International Financial Service Centre, and

 

-           consideration is paid or payable in foreign currency

79. Income from international Sporting event [Section 10(39)]

Any specified income (which is from such international event and which is notified by the Central Govt.) of specified persons from any international event held in India shall be fully exempted if

  1. such event is approved by the international body regulating the international sport relating to such event

  2. it has participation by more than two countries ; and

  3. is notified by the Central Govt. in this regard.

80. Income received as grant by a subsidiary company [Section 10(40)]

Income of any subsidiary company by way of grant or otherwise received from its Indian holding company which is engaged in the business of generation/ transmission/distribution of power is exempt, if such receipt is for settlement of dues in connection with reconstruction or revival of an existing business of power generation. The exemption is available, if the reconstruction or revival is by way of transfer of business to the Indian company notified under section 80 IA(4)(v)(a).

 

Under section 10(41), any capital gain arising in the above case is not chargeable to tax, if the transfer has taken place before April 1, 2006

81. Income from transfer of asset of an undertaking engaged in the business of generation, transmission or distribution of power [Section 10(41)]

Income from transfer of capital asset of an undertaking engaged in the business of generation, transmission or distribution of power where such transfer takes place on or before 31.3.2006 and transfer is made to the Indian company as notified u/s 801A.
 
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Exempted Incomes : Section-10(26AAN),Sec-10(26AAB),Sec-10(26B),Sec-10(26BB),Sec-10(26BBB)
Exempted Incomes : Section-10(27),Sec-10(29A),Sec-10(30),Sec-10(31),Sec-10(32)
Exempted Incomes : Section-10(33),Sec-10(34),Sec-10(34A),Sec-10(35),Sec-10(35A),Sec-10(36)
Exempted Incomes : Section-10(37),Sec-10(38),Sec-10(39),Sec-10(40),Sec-10(41)
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