Page 349 - DCOM301_INCOME_TAX_LAWS_I

Income Tax Laws – I

Notes Section 54EB: If any long term capital asset is transferred before 1.4.2000 and investment in
specified assets is made within a period of 6 months from the date of transfer, then exemption
would be available as computed in section 54F.
Section 54EC: This section has been introduced from assessment year 2001–2002 onwards. It
provides that if any long term capital asset is transferred and out of the consideration, investment
in specified assets including bonds issued by National Bank for Agricultural & Rural Development
or by National Highway Authority of India or by Rural Electrification Corporation is made
within 6 months from the date of transfer, then exemption would be available as computed in
Sec. 54F.

Section 54ED: This section has been introduced from assessment year 2002–03 onwards. It provides
that if a long term capital asset, being listed securities or units, is transferred and out of the
consideration, investment in acquiring equity shares forming part of an eligible issue of capital
is made within six months from the date of transfer, then exemption would be available as
computed in Sec. 54F.

Notes Loss under Long Term Capital Gains cannot be set off against any income under
any other head but can be carried forward for 8 assessment years and be set off against
capital gains in those assessments.
Tax on Short Term Capital Gain Certain Cases {Sec. 111A, applicable from the assessment year
2005–06]: Section 111A is applicable if the following conditions are satisfied:
The taxpayer is an individual, HUF, firm, company or any other taxpayer.
During the previous year he has generated short-term capital gain on transfer of equity
shares or units in equity-oriented mutual fund.
The transaction of transfer of such securities is entered into on a recognized stock exchange
in India on or after 1.4.2004

Such transaction is chargeable to securities transaction tax.
If the above conditions are satisfied, short-term capital gain will be taxable at the rate of 10 per cent
(plus surcharge plus education cess).

Did u know? No deduction would be available under sections 80CCC to 80U from the
above-noted short-term capital gains.
Where the total income as reduced by such short-term capital gains is below the maximum
amount which is not chargeable to income-tax, then, such short-term capital gains shall be
reduced by the amount by which the total income as so reduced falls short of the maximum
amount which is not chargeable to income-tax and the tax on the balance of such short-term
capital gains shall be computed at the rate of ten per cent.

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Caution Exempt Income
The Finance Act 2003, has introduced S.10(33) and S.10(36) w.e.f. 01.04.2004 which provide
that income arising from certain types of transfer of capital assets shall be treated as
exempt income.

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