INTERVIEW QUESTIONS TAX CAPITAL GAINS TAX DETAILS

Question: ​Is there any benefit available in respect of re-investment of capital gain in any other capital asset?

Answer: A taxpayer can claim exemption from certain capital gains by re-investing the capital gain into specified asset. The following table highlights the assets in respect of which the benefit of re-investment is available:

Section under which benefit is available
Gain eligible for claiming exemption
Asset in which the capital gain is to be re-invested to claim exemption:-

Section 54
Long-term capital gain arising on transfer of residential house property.
Gain to be re-invested in purchase or construction of residential house property.

Section 54B
Long-term or short-term capital gain arising on transfer of agricultural land.
Gain to be re-invested in purchase of agricultural land.

Section 54EC
Long-term capital gain arising on transfer of any capital asset.
Gain to be re-invested in bonds issued by National Highway Authority of India or by the Rural Electrification Corporation Limited.

Section 54F
Long-term capital gain arising on transfer of any capital asset other than residential house property.
Net sale consideration to be re-invested in purchase or construction of residential house property.

Section 54D
Gain arising on transfer of land or building forming part of industrial undertaking which is compulsorily acquired by Government and was used for industrial purpose for a period of 2 years prior to its acquisition.
Gain to be re-invested to acquire land or building for industrial purpose.

Section 54G
Gain arising on transfer of land, building, plant or machinery in order to shift an industrial undertaking from urban area to rural area.
Gain to be re-invested to acquire land, building, plant or machinery in order to shift the industrial undertaking from an urban area to a rural area

Section 54GA
Gain arising on transfer of land, building, plant or machinery in order to shift an industrial undertaking from urban area to any Special Economic Zone.
Gain to be re-invested to acquire land, building, plant or machinery in order to shift the industrial undertaking from urban area to any Special Economic Zone.

Section 54GB
Long-term capital gain arising on transfer of residential property (a house or a plot of land). The transfer should take place during 1st April, 2012 and 31st March 2017.
The net sale consideration should be utilised for subscription in equity shares in an “eligible company”.

In order to claim the exemption on account of re-investment in various situations as discussed above, other conditions specified in the respective sections should be satisfied and the re-investment should be made within the period specified in the respective sections.

A taxpayer can claim exemption from certain capital gains by re-investing the capital gain into specified asset. The following table highlights the assets in respect of which the benefit of re-investment is available:

Section under which benefit is available
Gain eligible for claiming exemption
Asset in which the capital gain is to be re-invested to claim exemption:-

Section 54
Long-term capital gain arising on transfer of residential house property.
Gain to be re-invested in purchase or construction of residential house property.

Section 54B
Long-term or short-term capital gain arising on transfer of agricultural land.
Gain to be re-invested in purchase of agricultural land.

Section 54EC
Long-term capital gain arising on transfer of any capital asset.
Gain to be re-invested in bonds issued by National Highway Authority of India or by the Rural Electrification Corporation Limited.

Section 54F
Long-term capital gain arising on transfer of any capital asset other than residential house property.
Net sale consideration to be re-invested in purchase or construction of residential house property.

Section 54D
Gain arising on transfer of land or building forming part of industrial undertaking which is compulsorily acquired by Government and was used for industrial purpose for a period of 2 years prior to its acquisition.
Gain to be re-invested to acquire land or building for industrial purpose.

Section 54G
Gain arising on transfer of land, building, plant or machinery in order to shift an industrial undertaking from urban area to rural area.
Gain to be re-invested to acquire land, building, plant or machinery in order to shift the industrial undertaking from an urban area to a rural area

Section 54GA
Gain arising on transfer of land, building, plant or machinery in order to shift an industrial undertaking from urban area to any Special Economic Zone.
Gain to be re-invested to acquire land, building, plant or machinery in order to shift the industrial undertaking from urban area to any Special Economic Zone.

Section 54GB
Long-term capital gain arising on transfer of residential property (a house or a plot of land). The transfer should take place during 1st April, 2012 and 31st March 2017.
The net sale consideration should be utilised for subscription in equity shares in an “eligible company”.

In order to claim the exemption on account of re-investment in various situations as discussed above, other conditions specified in the respective sections should be satisfied and the re-investment should be made within the period specified in the respective sections. Source: CoolInterview.com

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