Section 54E - Capital gain on transfer of capital assets not to be charged in certain cases

Capital gain reinvestment: reinvest or deposit net consideration in specified assets within six months for exemption or proportionate relief.

Capital gain from transfer of a long term capital asset is not charged if the assessee invests or deposits the whole or part of the net consideration in a specified asset within six months. If the new asset's cost equals or exceeds the net consideration, the entire gain is exempt; if less, exemption is proportionate to the cost. Deposits with banks/co operatives require a three year no loan declaration and an attested copy with the return and a post period certificate. If the new asset is transferred or converted into money within three years, the previously exempt amount is deemed long term capital gain.