Recent changes in Capital Gain Taxation in Indian Income Tax Act

Exemption US 54G

1. Eligible assessee: Individual and HUF
2.  Eligible gain:
Long term Capital Gains
2.  Eligible transfer:
Residential House Property
3. Condition of investment:
In equity shares of eligible company
4. Incorporation of company:
On or after 1 st April of the previous year in which the capital gains arises and upto due date of furnishing the return.
5. Nature of business:
Manufacture of article or thing
6. Controlling interest in such company:
The transferor of residential property should own 50% share capital or voting right.
7. Other condition in case any of company:
The company is a SME.
8. Restriction on transfer of assets by the company:
Utilisation of funds by the company for purchase of new assets and the company can not transfer such new assets upto 5 years from the date of acquisitions.
9. Extension of date of transfer of original asset:
From 31 March 2019 to 31 March 2021.
10. Condition of minimum holding has been reduced:
From 50% to 25%.
11. Reduction of restriction on period of holding:
Restriction on the period of holding from 5 years reduced to 3 years. Amendment in section 50C Full Value of consideration in case of transfer of land / building 1. Upto A.Y. 2018-19 stamp duty value was considered as full value of consideration in case of transfer of land / building when the actual sales value was lessor than stamp duty value.
2. From A.Y. 2019-20  stamp duty value will be taken as full value of consideration in a situation when the stamp duty value exceeds the actual sales value by 105%. Amendment in exemption under section 54EC from A.Y. 2019-20 1. Upto A. Y.  2018-19 the exception can be availed against gain arising transfer of capital asset of long term in nature, without any specific type i.e. even if such capital asset may be other than land or building.
2. From A.Y. 2019-20 the exception is available only in cases where capital gains arises from transfer of capital asset in the nature of land or  building or both only.