Capital gain exemption on reinvestment into specified assets provides deferred tax until subsequent conversion to money. Section 54E defers taxation of long term capital gains when the assessee reinvests consideration in qualifying specified assets within the prescribed period; full reinvestment exempts the entire gain, partial reinvestment exempts a proportionate part based on the cost of the new asset, and deposits' cost is defined. If the new asset is transferred or converted into money within the specified holding period, the previously exempted gain is treated as taxable capital gains in the year of such transfer or conversion.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Capital gain exemption on reinvestment into specified assets provides deferred tax until subsequent conversion to money.
Section 54E defers taxation of long term capital gains when the assessee reinvests consideration in qualifying specified assets within the prescribed period; full reinvestment exempts the entire gain, partial reinvestment exempts a proportionate part based on the cost of the new asset, and deposits' cost is defined. If the new asset is transferred or converted into money within the specified holding period, the previously exempted gain is treated as taxable capital gains in the year of such transfer or conversion.
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