Table of Contents
1. What is section 54EE of Income-tax Act?
Section 54EE of Income-tax Act provides exemption in respect of long term capital gain which arises during sale/transfer of any capital asset.
2. Can I claim exemption under section 54EE in respect of short term capital gain?
No, exemption under section 54EE can be claimed only in respect of long term capital gain.
3. In what type of asset should I invest in order to claim exemption under section 54EE?
Long term specified asset. (refer FAQ no 6)
4. When should I purchase the long term specified asset to claim exemption under section 54EE?
Within 6 months from the date of transfer of the capital asset.
5. When can I claim exemption under section 54EE?
The exemption under this section is available to assessee when he transfers any capital asset and invests in notified units of Specified Fund.
6. What do you mean by long term specified assets?
A unit or units of such fund, as may be notified by the Central Government issued before the 1st day of April, 2019.
7. Who can claim exemption under section 54EE?
Exemption under section 54EE is available to all assesses.
8. What is the maximum amount of exemption under section 54EE?
The amount of exemption will be the lower of the following
- Amount invested in specified assets.
- Capital gain from transfer of land or building.
- 50 lakhs.
9. When will exemption under section 54EE be withdrawn?
The exemption under this section will be withdrawn if the assessee transfers or converts or avails loan or advance on the security of such bonds within a period of 3 years from the date of acquisition of such bonds.
10. What happens if the entire amount of capital gain is not invested in purchase of a long term specified asset?
The amount of capital gain not invested is charged to tax as long-term capital gains under section 45.