Capital gains tax exemptions on reinvestment

Capital Gains tax exemptions on reinvestment:


NRIs are entitled to claim exemption from the tax if they reinvest long term capital gains /net sale consideration into following assets.


SECTION

CAPITAL GAINS FROM

REINVESTMENT IN

CONDITIONS

AMOUNT EXEMPTED

54

Long Term Capital Asset Being Residential House


(also referred as old asset)

Two Residential Houses in India*

 

(also referred as new asset)

There are many conditions, which shall be provided on request.

Lower of:

-      Long Term Capital Gains

-      Amount invested in new asset

-      Rs. 10 crores

54EC

Long Term Capital Asset being Land or Building or both (one or more)


(Also referred as old asset)






Tax Saving Bonds issued by:


-   National Highways Authority of India (NHAI)


- Rural    Electrification Corporation Ltd. (RECL).


-   Any other Bonds as may be notified by the Central Government.

(also referred as new asset)

a. Investment is to be made within 6 months from the date of transfer of old asset.


b. Bonds are to be held for a period of 5 years.


c. There are many other conditions, which shall be provided on request.

Lower of:


-  Long Term Capital Gains


-  Amount invested in new asset


-  Rs. 50,00,000/-

54F

Any Long-Term Capital Asset Other than Residential House

i.e., Transfer for Plot of land, commercial properties, securities 

and any other capital asset is eligible for exemption under this section


(also referred as old asset)

One Residential House in India.



(also referred as new asset)

There are many other conditions, which shall be provided on request.

Lower of:

-  Long Term Capital Gains

-  Long Term Capital Gains in the same proportion as to the amount 

    re- invested in new asset bears to Net Sale consideration

-  Rs. 10 crores.



Note: The above conditions have been provided briefly for your easy reference. There may be several additional conditions applicable which shall be provided separately on your request.

             

*  From FY 2020-21, the exemption can be claimed for the purchase or construction of 2 house properties if the amount of long-term capital gains does not exceed Rs. 2 crores. This option can be availed once in a lifetime, i.e. once this option is claimed, it cannot be further availed for the same or any succeeding financial years.



- Updated 10/2024