Amendment of section 54.
25. In section 54 of the Income-tax Act, with effect from the 1st day of April, 2024,––
(a) in sub-section (1), after the second proviso, the following proviso shall be inserted, namely:––
“Provided also that where the cost of new asset exceeds ten crore rupees, the amount exceeding ten crore rupees shall not be taken into account for the purposes of this sub-section.”;
(b) in sub-section (2),––
(i) after the words “amount so deposited shall”, the words, brackets and figure “, subject to the third proviso to sub-section (1)” shall be inserted;
(ii) after the proviso, the following proviso shall be inserted, namely:––
“Provided further that the capital gains in excess of ten crore rupees shall not be taken into account for the purposes of this sub-section.”.
Notes on Clauses:
Clause 25 of the Bill seeks to amend section 54 of the Income-tax Act relating to profit on sale of property used for residence.
Sub-section (1) of the said section, inter alia, allows deduction on the capital gains arising from the transfer of long-term capital asset, being buildings or lands appurtenant thereto, and being a residential house, if an assessee, within a period of one year before or two years after the date on which the transfer took place, purchased one residential property in India, or within a period of three years after that date, constructed one residential property in India.
It is proposed to insert a third proviso to the said sub-section so as to provide that where the cost of new asset exceeds ten crore rupees, the amount exceeding ten crore rupees shall not be taken into account for the purposes of that sub-section.
It is further proposed to insert a proviso to provide that the amount of capital gain in excess of rupees ten crores will not be taken into account for the purposes of sub-section (2).
These amendments will take effect from 1st April, 2024 and shall accordingly, apply in relation to the assessment year 2024-2025 and subsequent assessment years.
