The income tax department introduced a new Section 54EE of Income Tax Act with effect from 1st April 2017. Section 54EE provides for exemption from Capital Gains Tax on the sale of any long-term capital asset by investing into units of specified funds.
A taxpayer can claim an exemption u/s 54EE if they fulfill all the below conditions:
- Any assessee i.e. Individual, HUF, Company, LLP, Firm, etc can claim an exemption under Section 54EE.
- The asset sold is any Long Term Capital Asset (LTCA).
- The taxpayer invests Capital Gains within 6 months from the date of transfer of the original asset.
- Taxpayer invests in units of funds notified by the Central Government on or before 1st April 2019 to finance startups.
- The investment amount can not be more than INR 50 lakhs during any financial year.
- The investment amount can not be more than INR 50 lakhs during the current and succeeding financial year.
You can read more about Section 54EE here.
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