E xemptions From CAPITAL GAINS Facilitated By: Prof. Bharat Shah
Sec. 54 Individual/HUF LT Capital Gains from transfer of a Residential House Condition: The assessee has within a period of one year before or 2 years after the date of such transfer purchased or within a period of three years constructed a residential house. Also, the assessee must not transfer the new house within a period of 3 years from the date of its purchase or construction. Exemption Amount: Equal to the amount so utilized or the amount of capital gain, whichever is less. Sec. 54B Individual LT/ST Capital Gains from transfer of Agricultural Land Condition: If the assessee purchases within two years from the date of such transfer, any other agricultural land. The new land is not be transferred for a period of three years from the date of its purchase. Exemption Amount: Equal to the amount of capital gain or the cost of new agricultural land purchased(including the amount deposited in CGAS, 1988), whichever is less.
Sec. 54D Any Person LT/ST Capital Gains from Compulsory Acquisition of Industrial Undertaking Condition: If the assessee purchases/constructs within three years of the compulsory acquisition, any land or building forming part of Industrial Undertaking. Also the new Land/Building is not to be transferred for 3 years. Exemption Amount: Equal to the Capital Gain or the Cost of new Land/Building purchased or constructed (incl amt deposited in the CGAS, 1988), whichever is less. Sec. 54EA Capital Gains invested in Specified Bonds, Debentures, Shares or Mutual Funds Exemption NO LONGER Available. However LTCG arisen out of transfers effected before 1.4.2000 for which exemption has been claimed u/s 54EA certain Conditions has to be complied with: If the specified securities are transferred or converted to money or any loan is taken against them, within a period of three years of their acquisition, the amount of CG claimed to be exempt shall be taxable.
Sec. 54EB Capital Gains Invested in Long-Term Specified Assets Exemption NO LONGER available Sec. 54EC Any Person LT Capital Gains Invested in Certain Bonds Any LTCG arising on or after 1.4.2000 is exempt if the whole of the amount of such CG is invested in Long Term Specified assets i.e. Bonds issued by NHAI, REC within 6 months from the date of transfer. w.e.f. 1.4.2007 the investment in Long term Specified assets shall not exceed Rs 50 lakh in one financial year. Bonds redeemable after 3 years. CGAS not available. Sec. 54ED Capital Gains on Transfer before 1.4.2006 of Listed Securities/Units invested in equity shares Exemption NO LONGER available Sec. 54F Individual/HUF LT Capital Gains from an Asset other than Residential House Exempt if the whole of the net consideration is utilized within a period of 1 year before or 2 years after the transfer, or within 3 years in construction.
Sec. 54G Any Person LT/ST Capital Gains from Shifting of an Industrial Undertaking from Urban Area to Rural Area Sec. 54GA Any Person LT/ST Capital Gains from Shifting of an Industrial Undertaking from Urban Area to SEZ Sec. 10(33) Capital Gains on transfer of units of Unit Scheme, 1964 on or after 1.4.2002 Sec. 10(36) Long-Term Capital Gain arising on transfer of eligible equity shares of a company acquired on or after 1.3.2003 but before 1.3.2004 and held for 12 months or more Sec. 10(37) Any Capital Gain arising on compulsory acquisition of an agricultural land in Urban Areas where the compensation received on or after 1.4.2004 Sec. 10(38) Long-Term Capital Gain from transfer of equity shares of a company or units of an equity oriented fund on or after 1.10.2004 and subject to STT
Sec. 10(41) Capital Gain arising from transfer of an asset of an undertaking engaged in the business of generation or transmission of power, effected on or before 31.3.2006, to an Indian Company notified u/s 80-IA(4)(V)(a) Sec. 115F Long Term Capital Gains arising from the transfer of Foreign Exchange asset if the consideration is invested in any specified assets or deposited in notified savings certificates. The new asset should not be transferred or converted into money for 3 years.