Income Tax Act, 2025
Section 54EB: Capital gain on transfer of long-term capital assets not to be charged in certain
54EB. Capital gain on transfer of long-term capital assets not to be charged in certain
cases.—(1) Where the capital gain arises from the transfer of a long-term capital asset 1[before the 1st day
of April, 2000] (the capital asset so transferred being hereafter in this section referred to as the original
asset), and the assessee has, at any time within a period of six months after the date of such transfer
invested the whole or any part of capital gains, in any of the assets specified by the Board in this behalf
by notification in the Official Gazette (such assets hereafter in this section referred to as the long-term
specified assets), the capital gain shall be dealt with in accordance with the following provisions of this
section, that is to say,—
(a) if the cost of the long-term specified asset is not less than the capital gain arising from the
transfer of the original asset, the whole of such capital gain shall not be charged under section 45;
(b) if the cost of the long-term specified asset is less than the capital gain arising from the transfer
of the original asset, so much of the capital gain as bears to the whole of the capital gain the same
proportion as the cost of acquisition of the long-term specified asset bears to the whole of the capital
gain, shall not be charged under section 45.
Explanation.—“Cost”, in relation to any long-term specified asset, means the amount invested in
such specified asset out of capital gains received or accruing as a result of the transfer of the original
asset.
(2) Where the long-term specified asset is transferred or converted (otherwise than by transfer) into
money at any time within a period of seven years from the date of its acquisition, the amount of capital
gains arising from the transfer of the original asset not charged under section 45 on the basis of the cost of
such long-term specified asset as provided in clause (a), or as the case may be, clause (b) of
sub-section (1) shall be deemed to be the income chargeable under the head “Capital gains” relating to
long-term capital assets of the previous year in which the long-term specified asset is transferred or
converted (otherwise than by transfer) into money.
Explanation.—In a case where the original asset is transferred and the assessee invests the whole or
any part of the capital gain received or accrued as a result of transfer of the original asset in any long-term
specified asset and such assessee takes any loan or advance on the security of such specified asset, he
shall be deemed to have converted (otherwise than by transfer) such specified asset into money on the
date on which such loan or advance is taken.
(3) Where the cost of the long-term specified asset has been taken into account for the purposes of
clause (a) or clause (b) of sub-section (1), a deduction from the amount of income-tax with reference to
such cost shall not be allowed under section 88.]
2[54EC. Capital gain not to be charged on investment in certain bonds.—(1) Where the capital
gain arises from the transfer of a long-term capital asset 3[, being land or building or both,] (the capital
asset so transferred being hereafter in this section referred to as the original asset) and the assessee has, at
any time within a period of six months after the date of such transfer, invested the whole or any part of
capital gains in the long-term specified asset, the capital gain shall be dealt with in accordance with the
following provisions of this section, that is to say,—
(a) if the cost of the long-term specified asset is not less than the capital gain arising from the
transfer of the original asset, the whole of such capital gain shall not be charged under section 45;
Where the capital gain arises from the transfer of a long-term capital asset 1[before the 1st day
of April, 2000] (the capital asset so transferred being hereafter in this section referred to as the original
asset), and the assessee has, at any time within a period of six months after the date of such transfer
invested the whole or any part of capital gains, in any of the assets specified by the Board in this behalf
by notification in the Official Gazette (such assets hereafter in this section referred to as the long-term
specified assets), the capital gain shall be dealt with in accordance with the following provisions of this
section, that is to say,—
if the cost of the long-term specified asset is not less than the capital gain arising from the
transfer of the original asset, the whole of such capital gain shall not be charged under section 45;
if the cost of the long-term specified asset is less than the capital gain arising from the transfer
of the original asset, so much of the capital gain as bears to the whole of the capital gain the same
proportion as the cost of acquisition of the long-term specified asset bears to the whole of the capital
gain, shall not be charged under section 45.
Explanation.—“Cost”, in relation to any long-term specified asset, means the amount invested in
such specified asset out of capital gains received or accruing as a result of the transfer of the original
asset.
Where the long-term specified asset is transferred or converted (otherwise than by transfer) into
money at any time within a period of seven years from the date of its acquisition, the amount of capital
gains arising from the transfer of the original asset not charged under section 45 on the basis of the cost of
such long-term specified asset as provided in clause
of
sub-section
shall be deemed to be the income chargeable under the head “Capital gains” relating to
long-term capital assets of the previous year in which the long-term specified asset is transferred or
converted (otherwise than by transfer) into money.
Explanation.—In a case where the original asset is transferred and the assessee invests the whole or
any part of the capital gain received or accrued as a result of transfer of the original asset in any long-term
specified asset and such assessee takes any loan or advance on the security of such specified asset, he
shall be deemed to have converted (otherwise than by transfer) such specified asset into money on the
date on which such loan or advance is taken.
Where the cost of the long-term specified asset has been taken into account for the purposes of
clause
or clause
of sub-section
Where the capital
gain arises from the transfer of a long-term capital asset 3[, being land or building or both,] (the capital
asset so transferred being hereafter in this section referred to as the original asset) and the assessee has, at
any time within a period of six months after the date of such transfer, invested the whole or any part of
capital gains in the long-term specified asset, the capital gain shall be dealt with in accordance with the
following provisions of this section, that is to say,—
if the cost of the long-term specified asset is not less than the capital gain arising from the
transfer of the original asset, the whole of such capital gain shall not be charged under section 45;