Section 54EC-Capital gain not to be charged on investment in certain bonds

Section 54EC provides that the capital gains arising from the transfer of a long term capital assets will be exempt, if the whole or part of the capital gain, is invested in the long term specified assets at any time within a period of six months after the date of transfer. Further, proviso to this section provides exemption shall be available only when investment made in long term specified asset by an assessee during any financial year does not exceed Rs. 50,00,000/-.


a) As the financial year may differ from assessee to assessee, it is suggested that the term “financial year” be substituted with the term “previous year”.

b) Considering the inflationary conditions in the economy, it is further suggested that the said limit of Rs.50 Lakhs may be raised to Rs. 1 crore.

Source- Pre-Budget Memorandum 2014 on direct taxes by Institute of Chartered Accountants of India

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Tags : ICAI (2386) section 54EC (80)

0 responses to “Increase Investment Limit U/s. 54EC to Rs. 1 crore”

  1. vswami says:

    Anyone concerned is supposed to be not unaware that, according to a view urged in certain quarters, found favor in some decided cases (-is it ITAT or Court or both?),the exemption limit is Rs 1 crore (i.e. 2 x 50 lakhs) provided the investment is within the overall time limit of 6 months.
    On that premise, is it the suggestion that in those cases the exemption should be for Rs 2 crores?

  2. R.Venkataraghavan says:

    I whole heartedly support this suggested increase in the thresh hold limit from the present INR 50,00,000/- to INR 1,00,00,000/- or even more from cap gains investment angle in tax free bonds.This will obviate the need for to again reinvestment in another property as a specified under the ITAct.It is a vicious circle.Finmin should consider this suggestion,which will benefit many interested tax payers .

    Also this much increased investment amount will not go in circulation for the specified time frame.One way of curbing money circulation.


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