Applicability and Eligibility
- Any taxpayer i.e. Individual, HUF, Company, LLP, Firm, etc can claim an exemption under Section 54D of Income Tax Act.
- The asset which is transferred is Long Term Capital Asset or Short Term Capital Asset.
- Transfer of plant machinery or land or building for shifting industrial undertaking from urban area to rural area.
New asset to be Purchased or constructed
- purchase/ construction of new plant & machinery, land or building in such rural area (or)
- Shifting original assets to that area (or)
- Incurring notified expenses
Time limit of purchased or constructed
The new assets to purchased or constructed within the 1 year before or 3 years after the date of transfer.
Amount of exemption is applicable least of the following
- Amount of capital gain
- Cost of new asset purchased
- Deposit amount in capital gain account scheme
Tax treatment if New asset transferred
If new asset is transferred within 3 years from date of purchase construction then cost of acquistion of new asset is reduced by exempted capital gain.
