What is Section 54GB of the Income Tax Act?

Capital gains exemption under Section 54GB applies when residential property sale proceeds are invested in eligible company equity.

Section 54GB grants exemption from capital gains tax on sale of a long term residential property if the net consideration is invested in equity shares of an eligible company and that company uses the investment to purchase new plant and machinery, making tax relief conditional on this two step reinvestment mechanism involving the assessee and the recipient company.