Income Tax Act, 2025
Section 4: The Explanation omitted by Act 18 of 1992, s. 28 (w.e.f. 11993).
4. The Explanation omitted by Act 18 of 1992, s. 28 (w.e.f. 11993).
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1[54D. Capital gain on compulsory acquisition of lands and buildings not to be charged in
certain cases.—2[(1)] 3[Subject to the provisions of sub-section (2), where the capital gain arises] from
the transfer by way of compulsory acquisition under any law of a capital asset, being land or building or
any right in land or building, forming part of an industrial undertaking belonging to the assessee which, in
the two years immediately preceding the date on which the transfer took place, was being used by the
assessee for the purposes of the business of the said undertaking 4[(hereafter in this section referred to as
the original asset)], and the assessee has within a period of three years after that date purchased any other
land or building or any right in any other land or building or constructed any other building for the
purposes of shifting or re-establishing the said undertaking or setting up another industrial undertaking,
then, instead of the capital gain being charged to income-tax as the 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 of the land, building or right so
purchased or the building so constructed (such land, building or right 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 purchase or construction, 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 purchase or
construction, as the case may be, the cost shall be reduced by the amount of the capital gain.]
5[(2) The amount of the capital gain which is not utilised by the assessee for the purchase or
construction of the new asset before the date of furnishing the return of income under section 139,shall be
deposited by him before furnishing such return [such deposit being made in any case not later than the
due date applicable in the case of the assessee for furnishing the return of income under sub-section (1)
of section 139] in an account in any such bank or institution as may be specified in, and utilised in
accordance with, any scheme which the Central Government may, by notification in the Official Gazette,
frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes
of sub-section (1), the amount, if any, already utilised by the assessee for the purchase or construction of
the new asset together with the amount so deposited shall be deemed to be the cost of the new asset:
Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the
purchase or construction of the new asset within the period specified in sub-section (1), then,—
(i) the amount not so utilised shall be charged under section 45as the income of the previous year
in which the period of three years from the date of the transfer of the original asset expires; and
(ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme
aforesaid.
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if the amount of the capital gain is greater than the cost of the land, building or right so
purchased or the building so constructed (such land, building or right 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 purchase or construction, 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 purchase or
construction, as the case may be, the cost shall be reduced by the amount of the capital gain.]
5[
The amount of the capital gain which is not utilised by the assessee for the purchase or
construction of the new asset before the date of furnishing the return of income under section 139,shall be
deposited by him before furnishing such return [such deposit being made in any case not later than the
due date applicable in the case of the assessee for furnishing the return of income under sub-section
of section 139] in an account in any such bank or institution as may be specified in, and utilised in
accordance with, any scheme which the Central Government may, by notification in the Official Gazette,
frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes
of sub-section
the amount not so utilised shall be charged under section 45as the income of the previous year
in which the period of three years from the date of the transfer of the original asset expires; and
the assessee shall be entitled to withdraw such amount in accordance with the scheme
aforesaid.
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