Income Tax Act, 2025
Section 3: Ins. by s. 23, ibid. (w.e.f. 11988).
3. Ins. by s. 23, ibid. (w.e.f. 11988).
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(ii) the assessee shall be entitled to withdraw the unutilised amount in accordance with the
scheme aforesaid.
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2[54G. Exemption of capital gains on transfer of assets in cases of shifting of industrial
undertaking from urban area.—(1) Subject to the provisions of sub-section (2), where the capital gain
arises from the transfer of a capital asset, being machinery or plant or building or land or any rights in
building or land used for the purposes of the business of an industrial undertaking situate in an urban area,
effected in the course of, or in consequence of, the shifting of such industrial undertaking (hereafter in
this section referred to as the original asset) to any area (other than an urban area) and the assessee has
within a period of one year before or three years after the date on which the transfer took place,—
(a) purchased new machinery or plant for the purposes of business of the industrial undertaking in
the area to which the said undertaking is shifted ;
(b) acquired building or land or constructed building for the purposes of his business in the said
area;
(c) shifted the original asset and transferred the establishment of such undertaking to such area;
and
(d) incurred expenses on such other purpose as may be specified in a scheme framed by the
Central Government for the purposes of this section,
then, instead of the capital gain being charged to income-tax as income of the previous year in which the
transfer took place, it shall be dealt with in accordance with the following provisions of this section, that
is to say,—
(i) if the amount of the capital gain is greater than the cost and expenses incurred in relation to all
or any of the purposes mentioned in clauses (a) to (d) (such cost and expenses being hereafter in this
section referred to as the new asset), the difference between the amount of the capital gain and the
cost of the new asset shall be charged under section 45 as the income of the previous year ; and for
the purpose of computing in respect of the new asset any capital gain arising from its transfer within a
period of three years of its being purchased, acquired, constructed or transferred, as the case may be,
the cost shall be nil ; or
(ii) if the amount of the capital gain is equal to, or less than, the cost of the new asset, the capital
gain shall not be charged under section 45; and for the purpose of computing in respect of the new
asset any capital gain arising from its transfer within a period of three years of its being purchased,
acquired, constructed or transferred, as the case may be, the cost shall be reduced by the amount of
the capital gain.
Explanation.—In this sub-section, “urban area” means any such area within the limits of a municipal
corporation or municipality as the Central Government may, having regard to the population,
concentration of industries, need for proper planning of the area and other relevant factors, by general or
special order, declare to be an urban area for the purposes of this sub-section.
the assessee shall be entitled to withdraw the unutilised amount in accordance with the
scheme aforesaid.
1* * * * *]
2[54G. Exemption of capital gains on transfer of assets in cases of shifting of industrial
undertaking from urban area.—
Subject to the provisions of sub-section
purchased new machinery or plant for the purposes of business of the industrial undertaking in
the area to which the said undertaking is shifted ;
acquired building or land or constructed building for the purposes of his business in the said
area;
shifted the original asset and transferred the establishment of such undertaking to such area;
and
incurred expenses on such other purpose as may be specified in a scheme framed by the
Central Government for the purposes of this section,
then, instead of the capital gain being charged to income-tax as income of the previous year in which the
transfer took place, it shall be dealt with in accordance with the following provisions of this section, that
is to say,—
if the amount of the capital gain is greater than the cost and expenses incurred in relation to all
or any of the purposes mentioned in clauses
to
(such cost and expenses being hereafter in this
section referred to as the new asset), the difference between the amount of the capital gain and the
cost of the new asset shall be charged under section 45 as the income of the previous year ; and for
the purpose of computing in respect of the new asset any capital gain arising from its transfer within a
period of three years of its being purchased, acquired, constructed or transferred, as the case may be,
the cost shall be nil ; or
if the amount of the capital gain is equal to, or less than, the cost of the new asset, the capital
gain shall not be charged under section 45; and for the purpose of computing in respect of the new
asset any capital gain arising from its transfer within a period of three years of its being purchased,
acquired, constructed or transferred, as the case may be, the cost shall be reduced by the amount of
the capital gain.
Explanation.—In this sub-section, “urban area” means any such area within the limits of a municipal
corporation or municipality as the Central Government may, having regard to the population,
concentration of industries, need for proper planning of the area and other relevant factors, by general or
special order, declare to be an urban area for the purposes of this sub-section.