Capital Gain Not To Be Charged On Investment In Certain Bonds – Sec. 54EC

Capital Gain Not To Be Charged On Investment In Certain Bonds – Sec. 54EC

SCOPE Any long term-term capital gain arising to any assessee from the transfer of a long term capital asset
ASSET THE TAX PAYER SHOULD ACQUIRE Capital gain shall be invested within a period of 6 months after the date of such transfer in the long term specified asset which is Bonds of National Highways Authority of India (NHAI) or Rural Electrification Corporation Limited or any other Bond notified by Central Government in this behalf (Inserted by FA, 2017, w.e.f. 1-4-2018)
FROM WHICH DATE THE TIME LIMIT SHALL BE DETERMINED From the date of transfer of long term capital asset but in the case of compulsory acquisition from the date of receipt of compensation.
HOW MUCH IS EXEMPT Capital gain shall be exempt to the extent it is invested in the in the long term specified assets within a period of 6 months from the date of such transfer.

Provided that the investment shall be restricted only upto 50 Lakhs rupees if it is made on or after 1-4-2007

Provided further that the investment made by the assessee in long term specified asset, out of capital gains arising from transfer of one or more original asset, during the FY in which the original asset or assets is transferred and in the subsequent FY does not exceed 50,00,000/-

IS IT POSSOBLE TO REVOKE EXEMPTION IN A SUBSEQUENT YEAR If the new asset is transferred or it is converted into money or a loan is taken on security of the new asset within three years of its acquisition then the amount of capital gains exempted earlier is taxable as LTCG of the previous year, in which the specified asset is transferred or converted.


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