Any long-term capital gain, arising to any assessee from the transfer of any Capital Assetswhether it is a buildings or land or both on or after April 1, 2000 shall be exempt to the extent such capital gain is invested within 6 months from the date of transfer of such above said capital assets,in long term specified assets such as bonds. However, these bonds cannot be sold within 5 years from the date of its acquisition. The investment in long-term specified assets cannot exceed INR 50 Lacs during any relevant financial year.
Therefore, Capital gain arising on transfer of any capital asset will be exempt u/s 54EC under the following situations:
- The Asset transferred is long-term capital asset whether it is land or a building or both.
- The gain will be long term capital gain.
- The asset must be transferred on or after April 01, 2000.
- The assessee has invested the long-term capital gains in the specified assets within a period of 6 months from the date of such transfer of capital asset.
- The assessee cannot claim the cost of investment as deduction under section 80C.
Amount of Deduction
To
avail the benefit the deduction u/s 54EC the assessee needs to invest in
specified asset within 6 months from the date of transfer of such asset.
Where
the long term specified asset is transferred within 3 years from the date of
its acquisition, then the amount of capital gain exempt u/s 54EC earlier, shall
be taxable as Long-Term capital Gain during the previous year in which the
above said asset is sold.
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