Exemptions Under Capital Gains

See.

Assessee to
whom allowed

Conditions go be satisfied

Quantum of exemption

54

Individual/HUF

1. Transfer should be of a residential house income of which is chargeable under the head ‘Income from house property’.

2. Ii must be a long-term capital asset.

3. Purchase of another residential house should be within one year before or 2 years after, or construction should be within 3 years after the date of transfer.

Note.—The assessee can purchase or construct only one residential house and that house must be in India

Actual amount
invested in new asset or the capital gain whichever is less.

54B

Individual/HUF

1. Transfer (excluding compulsory acquisition) should be of agricultural land.

2. Ii must have been used in the 2 years immediately preceding the date of transfer for agricultural purposes either by the assessee or his parent.

3. Another agricultural land should be purchased within 2 years after the date of transfer.

Actual amount
invested in new asset or the capital gain whichever as less.

54D

Any assessee which is an industrial
undertaking

1. There must be compulsory acquisition.

2. The property compulsorily acquired should be land and building forming part of an industrial undertaking,

3. The asset must have been used in the 2 years immediately preceding the date of transfer of the assessee for the purpose of the business of the undertaking.

4. Within a period of 3 years after the date of compulsory acquisition any other land or building should be purchased or constructed for the use of existing or newly set up industrial_undertaking.

Actual amount
invested in new asset or the capital gain whichever is less.

S4EC

Any assessee

1. The asset transferred should be a long-term capital asset
W.e.f. A.Y. 2019-20, The asset transferred should be a long-term capital asset being land or building or both

2. Within a period of 6 months after the date of transfer, the capital gain must he invested in the specified assets i.e. bonds redeemable after 3 years (5 years w.e.f. 1.4.2018) issued by NI-IA! & RECL or any other bond notified by the Central Government in this behalf.

The investment during the financial year in which original asset or assets are transferred
and in the subsequent financial year should not exceed 50 lakhs.

54EE

Any assessee

1. The asset transferred should be a long-term capital asset

2. Within a period of 6 months after the date of transfer, the capital gain must he invested in long-term specified asset i.e. unit or units issued before 1.4.2019 of such fund as may be notified by the Central Government in this behalf.

The investment during the financial year in which original asset or assets are transferred
and in the subsequent
financial year should not exceed Rs. 50 lakhs.

54F

Individual/HUF

1. The asset transferred should be a long-term capital asset, not being a residential house.

2. Within a period of 1 year before or 2 years after the date of transfer, a residential house should be purchased or constructed within a period of 3 years after the date of transfer.

Note.—The assessee can purchase or construct only one residential house and that house_must_be_in_India.

3. The assessee should not own more than one residential house on the date of transfer.

4. The assessee should not within a period of 2 years purchase or should not within a period of 3 years construct any residential house other than the new asset.

If the cost of the new residential house is not less than the net consideration then the whole of the capital gain. Otherwise, LTCG
Amt. invested
Net considcration pncc

54G

Any assessee being an
industrial
undertaking

1. Machinery, plant, building. or land used for the business of an industrial undertaking situated in an urban area should have been transferred.

2. Transfer should be due to shifting to any area other than an urban area.

3. Within a period of 1 year before or 3 years after the date of transfer purchased machinery, plant or acquired building or land or constructed building and completed shifting to the new area.

If the cost of the new assets and expenses incurred for shifting are greater than the capital gain, the whole of such capital gain. other-wise capital gain to the extent of the cost of the new asset.

54GA

Any assessee being an
industrial
undertaking

1. Machinery, plant, building, or land used for the business of an industrial undertaking situated in an urban area should have been transferred.

2. Transfer should be due to shifting to any Special Economic Zone whether developed in any urban area or any other area.

3. Within a period of 1 year before or 3 years after the date of transfer purchased machinery, plant or acquired building or land or constructed building and completed shifting to the new area.

If the cost of the new assets and expenses incurred for shifting are greater than the capital gain, the whole of such capital gain. Otherwise capital gain to the extent of the cost of the new asset.

54GB

Individual/HUF

Capital gain arising on the transfer of a long-term residential property (house or plot) shall be eligible for exemption if the amount of net consideration is invested in the equity shares of SME or eligible start-up company before the due date of furnishing the return of income under section 139(1) and the company utilizes such amount for acquiring new plant and machinery within one year from the date of subscription of shares.

If the amount of
investment in the new asset is not less than the net consideration then the rhole of the capital gain. Otherwise,

LTCG x [ Cost of New Asset / Net Consideration Price ]

Related Topics....Under the head 'Capital Gain'

Exemption of Capital Gains under Sections 54, 54B, 54D, 54EC, 54EE, 54F, 54G, 54GB anf 54H