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Home Acts & Rules Bill Bills FINANCE BILL, 2018 Chapters List Chapter III DIRECT TAXES - Income-tax This

Clause 20 - Amendment of section 54EC. - FINANCE BILL, 2018

FINANCE BILL, 2018
Chapter III
DIRECT TAXES - Income-tax
  • Contents

20. Amendment of section 54EC.

In section 54EC of the Income-tax Act, with effect from the 1st day of April, 2019,––

(a) in sub-section (1), after the words “long-term capital asset”, the words “, being land or building or both,” shall be inserted;

(b) in the Explanation occurring after sub-section (3), for clause (ba), the following clause shall be substituted, namely:––

‘(ba) “long-term specified asset” for making any investment under this section,––

(i) on or after the 1st day of April, 2007 but before the 1st day of April, 2018, means any bond, redeemable after three years and issued on or after the 1st day of April, 2007 but before the 1st day of April, 2018;

(ii) on or after the 1st day of April, 2018, means any bond, redeemable after five years and issued on or after the 1st day of April, 2018,

by the National Highways Authority of India constituted under section 3 of the National Highways Authority of India Act, 1988 (68 of 1988) or by the Rural Electrification Corporation Limited, a company formed and registered under the Companies Act, 1956 (1 of 1956) or any other bond notified in the Official Gazette by the Central Government in this behalf.’.

 



 

Notes on Clauses:

Clause 20 of the Bill seeks to amend section 54EC of the Income-tax Act relating to capital gain not to be charged on investment in certain bonds.

The said section, inter alia, provides that capital gain arising from the transfer of a long-term capital asset, invested in the long-term specified asset at any time within a period of six months after the date of such transfer, shall not be charged to tax subject to certain conditions specified in the said section.

It is proposed to amend the said section so as to provide that capital gain arising from the transfer of a long-term capital asset, being land or building or both, invested in the long-term specified asset at any time within a period of six months after the date of such transfer, the capital gain shall not be charged to tax subject to certain conditions specified in the said section.

Clause (ba) of the Explanation to the said section clarifies expression "long-term specified asset" for making any investment under the said section on or after the 1st day of April, 2007, to mean any bond, redeemable after three years and issued on or after the1st day of April, 2007 by the National Highways Authority of India or by the Rural Electrification Corporation Limited; or any other bond notified by the Central Government in this behalf.

It is proposed to substitute the said clause so as to provide that long-term specified asset for making any investment under the said section on or after the 1st day of April, 2007 but before the 1st day of April, 2018 shall mean any bond, redeemable after three years and issued on or after the 1st day of April, 2007 but before the 1st day of April, 2018 and for making any investment under the section on or after the 1st day of April, 2018 shall mean any bond, redeemable after five years and issued on or after the 1st day of April, 2018 by the National Highways Authority of India or by the Rural Electrification Corporation Limited or any other bond notified by the Central Government in this behalf.

These amendments will take effect, from 1st April, 2019 and will, accordingly, apply in relation to the assessment year 2019-2020 and subsequent years.

 
 
 
 

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