Capital gain on the transfer of long-term capital assets is not to be charged in certain cases

When the assessee has invested all or a portion of capital gains in any of the assets specified by the Board in this regard by notification in the Official Gazette, at any time within six months of the date of such transfer, and the capital gain arises from the transport of a long-term capital asset (the capital asset so transferred is referred to in this section as the original asset), the capital gain shall be treated in accordance with the provisions of this section,  that is to say,

  (a) The entirety of such capital gain shall not be subject to section 45 charges if the cost of the long-term designated asset is not less than the capital gain resulting from the transfer of the original asset;

  (b) The capital gain that bears to the entirety of the capital gain the same percentage as the cost of acquirement of the long-term stipulated asset bears to the whole of the capital gain shall not be charged under section 45 if the cost of a long-term specified asset is lower than the capital gain emerging from the transfer of the original asset.

Visit us at deduction under section 80g.

Any investment made from capital gains received or accumulating as a consequence of the transfer of the original asset is referred to as "cost" in connection to any long-term specified asset.

The number of financial gains arising from the transport of the original item not defined under section 45 on the basis of the amount of such long-term specified asset as supplied in clause (a) or, as the case may be, clause (b) of sub-section (1) shall be considered to be the income chargeable under the head "Capital gains" relative to any transfer or conversion of the long-term specified asset into money that occurs at any time within a time frame of seven years from the date of its acquisition.

Get your NGO registered for tax exemption under section 80g.

If the original asset is relocated and the assessee invests all or any portion of the capital gain realised as a result of the transfer in any long-term specified asset and then takes a loan or advance using the security of that specified asset, he will be considered to have converted the specified asset into cash on the date that loan or advance was taken (other than by transfer).

A deduction from the percentage of taxes with reference to the cost of the long-term defined asset is not permitted under section 88 when the cost has already been considered for the requirements of clause (a) or clause (b) above of the sub-section. Get benefits of 80c exemption.

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