1. Income from sale of shares in certain cases [Section 10(36)]
Any income arising from the transfer of a long-term capital asset, being an eligible equity shares in a company purchased on or after the 1st day of March, 2003 and before the 1st day of March 2004 and held for a period of twelve months or more shall be fully exempted.
2. Capital gain on compulsory acquisition of urban Agricultural land [Sec. 10(37)]
In the case of an assessee, being an individual or a Hindu undivided family, any income chargeable under the head “Capital gains” arising from the transfer of agricultural land, shall be exempted; where
(i) Such land is situate in any urban area as specified u/s 2(14)(iii) (a) or (b) i.e. land which is situated within the Municipal limits or within 8 kms. of city limits, if so notified
(ii) 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
(iii) 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
(iv) Such income has arisen from the compensation or consideration for such transfer received by such assessee on or after the 1st day of April, 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.
3. Exemption of long term capital gain [Section 10 (38)]
Any income arising from the transfer of a long-term capital asset, being securities, and the transaction of sale of such securities is entered into in a recognised stock exchange in India on or after the date on which Security Transaction Tax comes into force shall be fully exempted. The Security Transaction Tax has come into force with effect from 1-10-2004.
For the purposes of this clause :
(a) “securities” shall have the meaning assigned to it in clause, (h) of section 2 of the Securities Contracts (Regulation) Act, 1956(42) of 1956);
(b) “recognised stock exchange” shall have the meaning assigned to it in clause (J) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956).
4. Income from transfer of asset of an undertaking engaged in the business of generation, transmission or distribution of power [Section 10(40)]
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 3 1-3-2006 and transfer is made to the Indian company as notified u/s 801A.
Note : It is important to note that the above provisions exempting above capital gains do not require the assessee to invest the sale proceeds or capital gain in any new asset as in the case of exemptions prescribed u/s 54.