Long Term Capital Gain Exemption for Investment in Certain Bonds (Section 54EC) This exemption is is available an individual, HUF, company or any other person who invests the long term capital gain, within 6 months of a the transfer of the capital asset, in any of the specified bond (issued on or 6after April 1, 2006) redeemable after 3 years: National Highway Authority ofIndia (NHAI), or Rural Electrification Corporation Ltd. (REC) There is a limit of Rs. 50 lakh on the investments on or after April 1, 2007. The face value of a bond is generally Rs. 10,000 and the rate of return correctly averages about 5.5 to 5.75 per cent. This return is taxable income.
Long Term Capital Gain from the Transfer of a Capital Asset other than Residential House Property (Section 54F) The exemption is available only an individual or a HUF who transfers (or sells) a capital asset that results in a long-term capital gain, and then invests the
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amount of gain in acquiring a new residential house. This exemption is available subject to fulfillment of the following requirements: (i) The transferor assessee should purchase or a residential house in India within a period of one year before or two years from the date of transfer or construct a residential house within three years from the date of the transfer of the original house. (Construction must be completed within these 3 years.), and (ii) The new house property purchased or constructed has not been transferred within a period of three years from the date of purchase or construction. (Not covered: Amount of exemption, scheme of deposit and consequences on not meeting the requirements).
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