The document outlines various capital gain tax exemptions available under sections 54, 54B, 54EC, and 54F of the Indian Income Tax Act for long term capital gains reinvested in specified assets within certain time periods. It provides details on who can claim the exemption, eligible assets sold, assets that can be acquired to claim the exemption, applicable time limits, maximum exemption amounts, and whether capital gain deposit schemes can be utilized. The exemptions can be combined if eligibility criteria for multiple sections are met to maximize tax savings on long term capital gains.

1. From – Mansi Gandhi

2. * CAPITAL GAIN EXEMPTION
54,54B,54EC,54F AT A GLANCE
* Capital gain on sale of certain assets is exempted on purchase/construction of specified assets
under section 54,54B,54EC,54F subject to few conditions. These exemption has been tabulated
on the basis of following points.
Who can claim exemption
* Eligible assets sold
* Assets to be acquired for exemption
* Time limit for acquiring the new assets
* Exemption Amount
* Whether "Capital gain deposit account scheme" applicable
*
So it is easy to understand these exemption at a glance . Further these exemption are in
depended to each other and person can claim combination of two ,if he is eligible otherwise.

3. Long Term Capital Gain - u/s 54 u/s 54B u/s 54EC u/s 54F
Exemption
a. Who can claim Ind/HUF Individual /HUF added Any person Ind/HUF
exemption by Finance Bill 2012
w.e.f fy 12-13
b. Eligible assets sold A residential Agriculture Any long-term Any long term
House property landwhich has capital assets asset (other than a
(minimum holding been used by assess (minimum holding residential house prop
period 3 year) ee himself or by his period 3 years) erty ) provided on the
parents for agriculture date of transfer the
purposes during last 2 taxpayer does not own
yrs of transfer more than one
residential house
property from the
assessment year 2001-
02 (except the new
house)
c. Assets to be acquired Residential house Another agriculture land Bond of NHAI or Residential house
for exemption property (urban or rural) REC property
d. Time limit for Purchase :1 year 2 yrs forward 6 months forward Purchase :1 year back
acquiring the new back or or 2 year forward,
assets 2 year forw Construction:
ard, 3 year forward
Construction: 3
year forward
e. Exemption Amount Investment in the Investment in Investment in the Investment in the new
new assets or the agriculture land or new assets or capital assets / Net
capital gain, which capital gain, which ever gain, which ever i Sale consideration
ever is lower is lower s lower (Max. X capital gain
Rs. 50
Lacs in Fin. Yr.)
f. Whether "Capital gain Yes Yes not applicable Yes
deposit
account scheme"
applicable

4. * Long Term Capital Gain from the Transfer of Residential House Property
(Section 54)
The exemption under the Section 54 is available only an individual or a HUF who transfers (or
sells) a residential house/property that results in a long-term capital gain, and then invests the
amount of gain in acquiring a new residential house. This exemption is available subject to
fulfilment of the following requirements:
(i) The transferor shall be an individual or the HUF,
(ii) The asset to be transferred must be of long-term capital asset, being buildings or lands
appurtenant thereto, being a residential house,
(iii) The income from such residential house shall be assessable under the head "Income from
House Property",
(iv) The transferor assesse should purchase a residential house in India within a period of one
year before or two years from the date of transfer or construct a residential house within three
years from the date of the transfer of the original house. (Construction must be completed
within these 3 years.), and
(v) The new house property purchased or constructed has not been transferred within a period
of three years from the date of purchase or construction.
Amount of Exemption. The amount of exemption under section 54 is
1. Equal to the amount of the capital gain if cost of new house property is more than the capital
gain, or
2. Equal to the cost of the new house property if the cost is less than the capital gain.

5. * Deposit Scheme under Section 54. Where the amount of capital gain
is not so utilized for the purchase or construction of a new residential
house before the due date of furnishing of the return of income, it
shall be deposited by him on or before the due date in an account
with a public sector bank in accordance with the Capital Gain Account
Scheme, 1988. The amount already utilized on the new house
together with the amount deposited shall be deemed to be the
amount utilized for the purchase of new house under section 54. If
the amount deposited is not utilised for the purpose of purchase or
construction of new house within the stipulated period, then the
amount not so utilised will be treated as long term capital gain of the
previous year in which the period of three years expires. In such case
the assesse is entitled to withdraw the amount from the bank.
Consequences of Selling the New House Before 3-years. If the new
house property is transferred within a period of three years from the
date of the purchase or construction, the amount of capital gains
arising therefrom, together with the amount of gains exempted
earlier, will be chargeable to tax in the year of sale of the house
property. To attain this, the amount of exemption under section 54
shall be reduced from the cost of acquisition to the new house, while
calculating short-term capital gains on the transfer of the new asset.

6. *Capital Gain on the Transfer of
Agricultural Land (Section 54B)
Capital gains arising on the transfer of land used by an
individual or his parents for agricultural purposes for a
period of two years immediately preceding the date of
transfer is exempt form the tax if the individual assesse
has purchased another agricultural land within a period
of two years from the date of such transfer (subject to
the requirements).

7. *Capital Gain on Compulsory Acquisition of
Land and Building of an Industrial
Undertaking (Section 54D)
* Capital gains arising on the compulsory acquisition of any land or
building forming a part of an industrial undertaking is exempt
subject to the following requirements:
Such land or building was used by the assessee for the purpose of
industrial undertaking for two years preceding the date of
compulsory acquisition,
* The assessee has purchased any land or building or constructed a
building within 3 years from the date of the receipt of the
compensation, and
* Newly acquired land or building should be used for the purpose of
shifting or re-establishing the said undertaking or setting up
another industrial undertaking.

8. *Long Term Capital Gain Exemption for Investment in
Certain Bonds (Section 54EC)
* This exemption is available an individual, HUF, company or any
other person who invests the long term capital gain, within 6
months of a the transfer of the capital asset, in any of the
specified bond (issued on or after April 1, 2006) redeemable
after 3 years:
National Highway Authority of India (NHAI), or
* Rural Electrification Corporation Ltd. (REC)
* There is a limit of Rs. 50 lakh on the investments on or after
April 1, 2007.
The face value of a bond is generally Rs. 10,000 and the rate of
return correctly averages about 5.5 to 5.75 per cent. This
return is taxable income.

9. *Long Term Capital Gain from the Transfer of a Capital
Asset other than Residential House Property (Section
54F)
The exemption is available only an individual or a HUF who transfers
(or sells) a capital asset that results in a long-term capital gain, and
then invests the amount of gain in acquiring a new residential house.
This exemption is available subject to fulfilment of the following
requirements:
(i) The transferor assessee should purchase or a residential house in
India within a period of one year before or two years from the date
of transfer or construct a residential house within three years from
the date of the transfer of the original house. (Construction must be
completed within these 3 years.), and
(ii) The new house property purchased or constructed has not been
transferred within a period of three years from the date of purchase
or construction.