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[Section-54EC] : Capital Gain on Transfer of any Long Term Capital Asset

 

(i)         In case the capital gain arises from the transfer of a long term capital asset (to be called as the original asset) and the assessee has, at any time within a period of six months after the date of such transfer, invested the whole or any part of capital gains in the long term specified asset, such capital gain shall be exempted in accordance with the following provisions of this section

(a)        if whole of such capital gain is reinvested in the long term specified asset the whole of such capital gain shall be exempted.

(b)       if the amount of the long term capital gain reinvested in specified asset is less than the capital gain arising from the transfer of the original asset, amount so invested in specified asset shall be exempted. [Section 54EC(l)]

(ii)        Where the long term specified asset is transferred or converted otherwise than by transfer into money at any time within a period of three years from the date of its acquisition, the amount of capital gains arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such long term specified asset as provided in clause (a) or, as the case may be, clause (b) of sub-section (1) shall be deemed to be the income chargeable under the head “capital gains” relating to long term capital asset of the previous year in which the long term specified asset is transferred or converted (otherwise than by transfer) into money.

In a case where the original asset is transferred and the assessee invests the whole or any part of the capital gain received or accrued as a result of transfer of the original asset in any long term specified asset and such assessee takes any loan or advance on the security of such specified asset, he shall be deemed to have converted (otherwise than by transfer) such specified asset into money on the date on which such loan or advance is taken. [Section 54EC(2)]

(iii)       The Finance Act 2007 (w.e.f. 1-4-2007) has imposed a ceiling on investment by an assessee in such long term specified assets during any financial year upto 50 lakhs. This means that exemption u/s 54 EC shall be restricted upto 50 lakhs only on investments made on or after 1-4-2007 in the long term specified assets.

(iv)       “Cost”, in relation to any long term specified asset, means the amount invested in such specified asset out of capital gains received or accruing as a result of the transfer of the original asset.

(v)        “Long term specified asset” shall mean any bond redeemable after three years and issued on or after 1st April 2007 by the National Highway Authority of India or by Rural Electrification Corporation Limited.

 
More Topics ... @ ' Capital Gain'

Capital Gain , Capital Assets & Property for Computing Capital Gain
Types of Capital Assets for Computing ‘Capital Gain’
Types of Capital Gains for Computing ‘Capital Gain’
Computation Of ‘Period Of Holding
 Transfer Of A Capital Asset [Section-2(47)]
Transactions Not regarded as ‘Transfer’ [Section-47]

Capital Gain is Deemed to be the Income of the Previous Year
Amount Received from insurer [Section-45(1A)] for Computing Capital Gain
Transfer of Capital Assets by a person to firm, AOP or Body Of Individuals (BOI) [Section 45(3)] for Computing Capital Gain
 Enhancement of Compensation on Compulsory Acquisition of Assets [Section-45(5)] for Computing Capital Gain
Sale of units Purchased for Deduction U/s 80 CCB [Section-45(6)]
Distribution of Assets by A Company in Liquidation for Computing Capital Gain
Capital Gain on Purchase by A Company of its Own Shares or Other  Securities [Section 46A]
DEEMED CAPITAL GAIN [Section 47A]
Method of Computing Capital Gain [Section 48]
Expenses Disallowed u/s Section 48 for Computing Capital Gain
Cases in which the Indexation of Cost is not to be done while Calculating long Term Capital Gain
 Computation of Capital Gain in Case of Non-Residents [Sec. 48 Proviso 1 ]
Determination of Cost of Acquisition for Computing Capital Gain.
Taxation of Gain on ‘Slump Sale’ for Computing Capital Gain
Special Provision for full Value of Consideration in certain cases (Section 50C] for Computing Capital Gain
Treatment of Advance Money Received and Forfeited (Section-51] for Computing Capital Gain
Cost of Acquisition of Goodwill [Section-55(2)(a)] for Computing Capital Gain
Cost of Acquisition of Shares [Section 55 (2) (v)] for Computing   Capital Gain
Capital Gains Exempted u/s 10
Capital Gains—Exempted u/s 54
 Capital Gain on Transfer of Self-Cultivated Agricultural Land in Urban   Areas [ Section 54 B]
Capital Gains on Compulsory Acquisition Of Land And Buildings [Section 54D]
 Capital Gain on Transfer of any Long Term Capital Asset [Section-54EC]
Exemption of Capital Gain on Transfer Of Long-Term Capital Assets in case of Investment In Residential House [Section 54F]
Capital Gain on Shifting of Industrial Undertaking from Urban Areas to Non-Urban Areas [Section 54G]
 Exemption of Capital Gain on transfer of assets in case of shifting of Industrial Undertaking from an urban area to any Special Economic Zone (SEZ) [Sec. 54GA]
Long term Capital Gain on Transfer of Residential Property if Net Consideration is Invested in the Equity Shares of an Eligible company [Section 54GB] [w.e.f. A.Y. 2013- 14 but upto A.Y. 201 7-1 8]
Reference to Valuation Officer [Section 55] towards Capital Gain
 TREATMENT OF CAPITAL LOSS [Section 74]
TAX ON CAPITAL GAINS

 
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