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Parag Kukreja

Parag KukrejaArticle Explains all about Section 54, Section 54B, Section 54D, Section 54G/ 54GA in case of shifting to SEZ, Section 54EC, Section 54F and Section 54GB

S.No. Basis Section 54 Section 54B Section 54D
1.) Allowability Exemption is Allowed provided the Assessee has Long Term Capital Gains on transfer of Residential House Exemption is Allowed provided the Assessee has  Capital Gains on transfer of Agricultural Land Exemption is Allowed provided the Assessee has  Capital Gains on Compulsory Acquisition of Industrial Undertaking.
2.) Allowed To Individual/HUF Individual/HUF All Assessees
3.) Conditions to be Satisfied a.) The Assessee Should have purchased one Residential in India house either one year before or two years after the date of transfer OR The Assessee should Construct one residential house in India within three years after the date of transfer a.) The Assessee Should have purchased one or more Agricultural Land within a period of two years after the date of transfer a.) The Assessee Should have Invested the Amount in Land and Building for the purpose of Industrial Undertaking within a period of Three years after the date of Payment by Government.
b.) The Assesee Should either Purchase or Construct only one House within the specified time period. b.) The Assesee or his parentsor HUF should have been using Agricultural Land so transferred for a period of atleast 2 years at the time of Sale b.) The Assesee  should have been using such Land and Building  for the purpose ofIndustrial Undetaking for a period of atleast 2 years at the time of Acquisition.
c.) The House so purchased or constructed should not be transferred for a period of at least Three Years c.) The Land so purchased  should not be transferred for a period of at least Three Years c.) The Land and Building so purchased  should not be transferred for a period of atleast Three Years
4.) Amount of Exemption Amount of Exemption shall be equal to Amount Invested(Subject to Capital Gains) Amount of Exemption shall be equal to Amount Invested(Subject to Capital Gains) Amount of Exemption shall be equal to Amount Invested(Subject to Capital Gains)
5.) Capital Gain Accounts Scheme,1988 Aplicability* Applicable Applicable Applicable
6.) Consequences If Assessee Violates Condition c.) stated above Exemption earlier allowed shall be withdrawn in special manner i.e. While Computing Capital Gains, Cost of Acquistion shall be reduced by the amount of exemption earlier taken. If Assessee Violates Condition c.) stated above Exemption earlier allowed shall be withdrawn in special manner i.e. While Computing Capital Gains, Cost of Acquistion shall be reduced by the amount of exemption earlier taken. If Assessee Violates Condition c.) stated above Exemption earlier allowed shall be withdrawn in special manner i.e. While Computing Capital Gains, Cost of Acquistion shall be reduced by the amount of exemption earlier taken.

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S.

No.

Basis Section 54EC Section 54F Section 54GB Section 54G / Section 54GA
1.) Allowability Exemption is Allowed provided the Assessee has long term Capital Gains on transfer of any long term Capital Asset (being land or building or both wef A.y 2019-20) Exemption is Allowed provided the Assessee has Long Term Capital Gains on transfer of any Capital Asset except Residential House Exemption is Allowed provided the Assessee has Long Term Capital Gains on transfer of any Residential House or Plot. Exemption is Allowed provided the Assessee has  Capital Gains in connection with shifting of Industrial Undertaking from Urban area to any other area.
2.) Allowed To All Assessees Individual/ HUF Individual/ HUF All Assessees
3.) Conditions to be Satisfied a.) The Assessee Should have Invested the Amount in Long Term Specified Asset within a period of Six Months from the date of transfer. However from the Assessment Year 2018-19 investment in any bonds redeemable after three years shall be eligible for exemption. Wef A.y 2019-20 investment in any bonds redeemable after five  years shall be eligible for exemption a.) The Assessee Should have purchased one  residential house property  in India  either one year before or two years after the date of transfer OR The Assessee should Construct one residential house property in India within three years after the date of transfer a.) The Assessee Should have Incorporated a new company before due date of filling of Return of Income & Should have subscribed to more than 50% of the Shares of the Company.

 

b) This provision is not applicable  to any transfer of residential property made after the 31st day of March, 2017 . however for in vestment in eligible start-up  the transfer can take place upto 31.03.2018

a.) The Assessee Should have Invested the Amount in Land and Building or P&M ( Not Furniture & Fixture  for the purpose of Industrial Undertaking either one year before or three years after the date of transfer
b.) The Assesee  is not allowed to Convert the Security into Cash i.e. The Assessee is not allowed to take Loan on the basis of security b.) The Assesee Should either Purchase or Construct only one House within the specified time period. Also, the Assessee should not have more than one house in his name at the time of transfer of original asset income from which is charged under the head Income from house property c.) The Assesee Should Invest the Amount in Plant & Machinery within one Year from the date of Purchase of Shares. Exemption shall also be allowed for shifting expenses
c.) The Asset so purchased  should not be transferred before 3 years (5 years if the investment in specified asset is made on or after 01.04.2018 ) c.) The House so purchased or constructed should not be transferred for a period of atleast Three Years

d) if the  assessee purchases, within the period of two years after the date of the transfer of the original asset, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head “Income from house property”, other than the new asset,

d.) The  shares and Plant & Machinery so purchased  should not be transferred for a period of at least Five Years. c.) The Asset so purchased  should not be transferred for a period of atleast three years.
4.) Amount of Exemption Amount of Exemption shall be equal to Amount Invested (Subject to Capital Gains) Amount of Exemption shall be equal to Capital Gains ÷ Net Consideration × Amount of Investment Amount of Exemption shall be equal to Capital Gains ÷ Net Consideration × Amount of Investment (Subject to Capital Gains) Amount of Exemption shall be equal to Amount Invested in Land & Building and Plant & Machinery (Not Furniture & Fixture)  (Subject to Capital Gains)
5.) Capital Gain Accounts Scheme,1988 Aplicability* Not Applicable Applicable Not Applicable. However If Assessee fails to make investment in P&M within one year then amount shall be deposited into Specified Bank Account Applicable
6.) Consequences If Assessee Violates Condition c.) stated above Exemption earlier allowed shall be considered to be Long Term Capital Gain of the Year in which the Asset has been transferred. If Assessee Violates Condition c & d  stated above Exemption earlier allowed shall be considered to be Long Term Capital Gain of the Year in which the Asset has been transferred. If Assessee Violates Condition d.) stated above Exemption earlier allowed shall be withdrawn and shall be deemed to be the income of the assessee chargeable under the head “Capital gains” of the previous year in which such equity shares or such new asset are sold or otherwise transferred, If Assessee Violates Condition c.) stated above Exemption earlier allowed shall be withdrawn in special manner i.e. While Computing Capital Gains, Cost of Acquistion shall be reduced by the amount of exemption earlier taken.

Capital Gain Accounts Scheme,1988*:-

1.) For Claiming Exemption, Assessee Should make Investment before Due Date of Filing of Return of Income.

2.) If the Assessee Fails to do so, Amount should be deposited in Capital gain Accounts Scheme before due date of return of Income to Claim the Exemption.

3.) Amount so Deposited can be withdrawn only for making Investment within the prescribed period.

4.) Any utlised amont in Capital Gain Scheme shall be considered to be capital gain of the year in which time period has been expired.

5.) Any Interest received on such amount shall be Considered to be income u/s Other Sources.

Note: The period of holding to qualify as long term capital asset for land or building or both has been change to more than 24 months

Also Read: Brief Synopsis of Capital Gain Exemption u/s 54, 54EC & 54F

(Republished With Amendments)

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19 Comments

  1. Kulwant Kaur Kang says:

    I had sold my Flat in Pune for Rs. 113 lacs in Feb 2021 and invested 50 lacs out of the sale proceeds in five year NHAI bonds under section 54EC partly in Apr and partly in Jul 2021. The Flat was bought in Year 2002 for Rs. 18 lacs approximately and the Capital Gain calculated is about 61 Lacs. When I try to fill the Form ITR 2, system does ignores the investment under 54EC. Why is this happening?

  2. satish says:

    I purchased house in 2000 and sold and transferred in March 2020 but part payment received in jan-2019 then do I have to pay LCGT OR have to keep in bonds or have to invest or can. keep with me till march-20

  3. ANIL KAMBLI says:

    i had purchased a house in 2006 & sold in 2020, & difference amt re-invested in new flat purchase.in ITR form which section used for re-invested column (54 to 54B)…..please explain sir…..

    1. Basavarajappa J R J R says:

      sir , Can I use my capital gain, arising out of my sale land for the construction of a house which in the name of my wife.

  4. Narendra lodhia says:

    I SOLD RESIDENTIAL FLAT ON 10-10-2018, WHAT IS THE DUE DATE TO REINVEST OR BUY NEW RESIDENTIAL FLAT ?.

    AMOUNT KEPT IN CAPITAL GAIN ACCOUNT WITH BANK.

  5. Eklavya Vijay Shinde says:

    if the person have three residential property in the financial year and one residential property he had sold. can he is liable for invest capital gain in other residential property.

  6. MADHAV BHATHIRE says:

    I AM A PENSIONER AND MADE SMALL POROFIT BY SELLING SHARES WHAT ITR RETURN I HVE TO FILE AND THIS PROFIT FROM SALE OF SHARES TO BE SHOWN WHERE

  7. TAPAS KUMAR BASU says:

    I had purchased a flat on 6.6.2018 (Regn. Dt.). Now, I am selling my existing flat ( Dt.of Purchase: May 1997) in the month of Aug’19. Whether exemption on capital Gain Tax is allowed Sec 4.

  8. NISHA says:

    OURS SALE DEED DATE IS OF MARCH AND WE INVEST IN 54 EC AS ON 31/08/2018 BUT WE FORGOT TO TOOK SUCH INVESTMENT IN RETURN SO WHAT WE HAVE TO DO
    WHETHER TO REVISE RETURN OR I CAN TAKE IN F.Y. 2018-19 54 EC INVESTMENT?

  9. Sangameswaran SD says:

    I sold my land in June 2018 which was bought in the year 1990. I got the land at a price of 7200. I sold for 34.32.000. Actually, the document was for a value of Rs 45,60,000 and I got the difference in capital gain tax Rs 2,34,624 for the excess amount of Rs 11,28,000 (which I did not receive ) in a different account from one of the relatives of the buyer. I have paid a commission of 1,00,000 to the broker 20000 by cash and 80000 by Fund transfer Guideline value as of 1-4-2000 was 44 / sq ft. Present guideline value is 536. Area of the land is 2091 sq ft
    How much capital gain tax should I pay and when I should pay this?
    Is there is any other ways to reduce the tax?
    If I am unable to do any of the investment. When should I pay the tax?
    Pl suggest Thanks in Advance

  10. Shrikant Mashelkar says:

    How to account for part of corpus fund received in FY 2017-18 , against redevelopment from the builder in this year’s return filing?

    i.e AY 2018-19

  11. divya says:

    i had purchased property in 2006 now i had sold the property in 2016. i m planning to invest in another house property so in the mean time i have invested in the fd account so what is the treatment in filing returns

  12. DINKAR VISHWANATH SARAF says:

    I have constructed 3 room small house of 550 sq.ft. in1976. now I wanted to reconstruct it with the help of capital gain under 54F

  13. sekar says:

    If A & B are jointly having a flat and also having one flat each in their single name. If the joint property is sold and the Capital gain is invested in a new flat in same joint names, whether capital gain exemption under sec 54 is available if the investment in new flat is done within 3 months from now.???

  14. Prashanth says:

    Thank for Sharing information,
    If a person purchase a Agriculture land and avail the benefit of 54B and afterwords before expiry of 3 years the person converts the Agriculture Land into Non Agriculture land then what will be the implication ?

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