What are the circumstances in which exemption under section 54EE can be withdrawn?
Subject
FAQs on Exemption available from Capital gains
etds-answer
The exemption claimed by assessee under section 54EE can be withdrawn in the following circumstances:
a) Transfer of new asset within 3 years: If long-term specified assets are transferred within 3 years, the exempted amount of capital gain, arising from the transfer of original asset, is chargeable to tax as long-term capital gain in the previous year in which bonds are transferred. Thus, the exemption granted earlier on transfer of original long-term capital asset stands forfeited.
b) Conversion of bonds into money within 3 Years: If long-term specified assets are converted into money within a period of 3 years from the date of its acquisition, the exempted amount of capital gain is chargeable to tax as long-term capital gain in the previous year in which such assets are converted into money.
a) Transfer of new asset within 3 years: If long-term specified assets are transferred within 3 years, the exempted amount of capital gain, arising from the transfer of original asset, is chargeable to tax as long-term capital gain in the previous year in which bonds are transferred. Thus, the exemption granted earlier on transfer of original long-term capital asset stands forfeited.
b) Conversion of bonds into money within 3 Years: If long-term specified assets are converted into money within a period of 3 years from the date of its acquisition, the exempted amount of capital gain is chargeable to tax as long-term capital gain in the previous year in which such assets are converted into money.