Exemption from Capital Gain – myITreturn Help Center

If the taxpayer invests the sale proceeds of one capital asset to purchase the other specified capital asset/s within the specific time, then he/she can claim the benefit of exemption.

Following are the various exemptions provided by the Income-tax Act:

Particulars	Section 54	Section 54B	Section 54D	Section 54EC	Section 54F	Section 54GB
Who can claim	Individual or HUF	Individual or HUF	Any person who is having an industrial undertaking	Any person	Individual or HUF	Individual or HUF
Nature of asset sold	Long term residential house	Agricultural land	Industrial Undertaking compulsorily acquired by the Government	Any capital asset	Any long term capital asset (except the residential house)	Residential House Property
Nature of asset to be purchased to claim exemption	Another residential house property in India	Another agricultural land in India	New Industrial Undertaking in India	Bonds of specified companies	New residential house property in India (Person should not own more than 1 house property on the date of sale)	Equity shares of Eligible business**
Period within which new asset to be purchased	One year before the date of sale OR within two years after the date of sale OR within three years after the date of sale	Within two years after the date of sale	Within three years after the date of compulsory acquisition	Within six months after the date of sale of a capital asset	One year before the date of sale OR within two years after the date of sale OR within three years after the date of sale	Before the due date of filing of return
Amount of Exemption	Capital gain on an old house or Investment in a new house, whichever is lower	Capital gain on old agricultural land or Investment in agricultural land, whichever is lower	Capital gain on old Industrial Undertaking or Investment in new Industrial Undertaking, whichever is lower	Capital gain on capital asset sold or Investment in specified bonds, whichever is lower. [However maximum exemption is Rs. 50,00,000/- for that capital asset]	Cost of a new house divided by sale consideration of capital asset sold multiplied by capital gain	Cost of Shares divided by sale consideration of capital asset sold multiplied by capital gain
Lock-in period*	Three years	Three years	Three years	Three years	Three years	Five years

Some important terms you should be aware of-

*What is the Lock-in period: The period during which the taxpayers are not allowed to sell the new capital asset is called as “lock-in period”. If a taxpayer has sold the asset within the lock-in period, the exemption claimed in previous years’ shall get cancelled. And he will have to pay capital gain in the year of default.

**Eligible business: Eligible business means the taxpayer is required to start a new company with a new plant & machinery using the proceeds of the capital asset sold. The taxpayer should have at least 50% shares in the new company.

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