The document provides an overview of various capital gains exemptions available under Sections 54, 54B, 54D, 54EC, 54EE, 54F, 54G, 54GA, and 54GB of the Income-tax Act, 1961, specifying the eligible assessees, qualifying capital assets, nature of capital gains, eligible reinvestment options, exemption limits, investment timelines, Capital Gains Account Scheme (CGAS) requirements, and conditions for withdrawal of exemption. Individuals, Hindu Undivided Families (HUFs), and other assessees may claim exemptions depending on the nature of the transferred asset and the prescribed investment. Eligible reinvestments include residential houses, agricultural land, industrial assets, specified bonds, notified funds, plant and machinery, assets in Special Economic Zones (SEZs), and equity shares of eligible companies or eligible start-ups. The document also prescribes specific investment periods, including one year before or up to three years after transfer, or six months in specified cases, while requiring CGAS deposits before the due date for filing the income-tax return wherever applicable. Exemptions may be withdrawn if the prescribed conditions are violated, such as premature transfer of new assets or non-utilisation of CGAS deposits. The document incorporates amendments made by the Finance Act, 2026, including the notification of HUDCO bonds under Section 54EC and the ₹10 crore investment cap applicable from Assessment Year 2024-25.
Various exemptions available in respect of Capital Gains
This document entails the different type of exemption available to an assessee with respect to sale of a capital asset. The document contains the detials about the type of capital asset, capital gains and type of new asset in which the amount needs to be reinvested.
Particulars |
Section 54 |
Section 54B |
Section 54D |
Section 54EC |
Section 54EE |
Eligible Assessee |
Individuals and Hindu Undivided Family (HUFs) |
Individuals and Hindu Undivided Family (HUFs) |
Any assessee |
Any assessee |
Any assessee |
Qualifying Asset |
Residential House Property |
Agricultural land |
Land or building forming part of an Industrial undertaking transferred by way of compulsory acquisition |
Land or building or both |
Any Capital Asset |
Nature of Capital Gains |
Long Term Capital Gains (LTCG) |
Long or Short Term Capital Gains (LTCG/ STCG) |
Long or Short Term Capital Gains (LTCG/ STCG) |
Long Term Capital Gains (LTCG) |
|
Investment in new Property |
Residential House Property in India |
Agricultural land |
Land or building for the purposes of shifting or re-establishing the undertaking or setting up another industrial undertaking |
-National Highway Authority of India (NHAI Bonds)-Rural Electrification Corporation Limited (REC Bonds)-Any other bond notified by the Central Government |
Units of Notified Fund |
Maximum amount of exemption allowed |
lower of:♦ Amount of long-term capital gains or♦ Amount invested in new house property and deposited in capital gain account scheme[Note 1] |
lower of:♦ Amount of capital gains; or♦Amount of investment in new agricultural land [including the amount deposited in Capital Gains Account Scheme] |
lower of:
|
lower of:
|
lower of:
|
Time Limit for making investment in new Property |
♦ Purchase: 1 year before or 2 years after the date of transfer♦ Construction: within 3 years from the date of transfer |
within 2 years after the date of transfer of original asset |
within a period of 3 years after the date of compulsory acquisition |
within 6 months of the transfer of the land, building, or both |
within 6 months of the transfer of the long term capital asset |
Time limit to deposit in Capital Gains Account Scheme (CGAS) |
On or before the due date of filing the return of income |
On or before the due date of filing the return of income |
On or before the due date of filing the return of income |
– |
– |
Withdrawal of Exemption |
♦ Amount deposited in CGAS not utilised in the prescribed time;♦ Transfer of new house within 3 years |
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♦ Amount deposited in CGAS not utilised in the prescribed time;♦ Transfer of new land or building within 3 Years |
♦Transfer of bonds within 5 years; or♦ Conversion of bonds within 5 Years |
Transfer of new asset within 3 years; orConversion of bonds into money within 3 Years |
–
Particulars |
Section 54F |
Section 54G |
Section 54GA |
Section 54GB |
Eligible Assessee |
Individuals and Hindu Undivided Family (HUFs) |
Any assessee |
Any assessee |
Individuals and Hindu Undivided Family (HUFs) |
Qualifying Asset |
Any Capital Asset other than residential house property |
Plant, machinery, land, or building, or any right in land or building used for the purpose of an industrial undertaking situated in an urban area |
Plant, machinery, land, or building, or any right in land or building used for the purpose of an industrial undertaking situated in an urban area |
Residential property (i.e. a house or plot of land) |
Nature of Capital Gains |
Long Term Capital Gains (LTCG) |
Long or Short Term Capital Gains (LTCG/STCG) |
Long or Short Term Capital Gains (LTCG/STCG) |
Long Term Capital Gains (LTCG) |
Investment in new Property |
Residential house property located in India |
New plant or machinery, purchase or construct a building, shift the original asset in to a non-urban area |
New plant or machinery, purchase or construct a building, shift the original asset in SEZ |
equity shares of an ‘eligible company’ or ‘eligible start-up’However, the eligible company buy new asset within 1 year after the date of subscription of shares. |
Maximum amount of exemption allowed |
If net consideration is invested in new house property – the entire capital gain will be exempt from taxation.If partial consideration is invested in new house property – the exemption will be granted in proportion to the amount invested.[Note 1] |
lower of:
|
lower of:
|
Amount of capital gain |
Time Limit for making investment in new Property |
|
within 1 year before or 3 years after the date of transfer |
within 1 year before or 3 years after the date of transfer |
Before the due date for furnishing of income-tax return. |
Time limit to deposit in Capital Gains Account Scheme (CGAS) |
On or before the due date of filing the return of income |
On or before the due date of filing the return of income |
On or before the due date of filing the return of income |
– |
Withdrawal of Exemption |
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|
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* The Central Government has notified bonds redeemable after five years and issued on or after 1st day of April, 2025 by ‘Housing and Urban Development Corporation Limited (HUDCO)’ as ‘long-term specified asset’ for section 54EC.[Notification no. 31/2025, dated 07-04-2025]
Note 1: Cost of new assetcannot exceed Rs. 10 crore. Further, if no investment is made by assessee in new asset and sum is deposited in capital gain account scheme, the maximum amount shall be taken into consideration is Rs. 10 crore for the purpose of exemption. (Applicable from Assessment Year 2024-25).
Disclaimer: The contents of this document are for information purposes only. This aims to enable public to have a quick and an easy access to information and do not purport to be legal documents. Viewers are advised to verify the content from Government Acts/Rules/Notifications etc.
“This document contains the provisions of the Income-tax Act, 1961, as amended by the Finance Act, 2026.”
[As amended by Finance Act, 2026]
(Republished with amendments)
