Section 23 - Amendment of section 54F - Finance Act, 1987

23. Amendment of section 54F In section 54F of the Income-tax Act, with effect from the 1st day of April, 1988, - (a) in sub-section (1), - (i) for the words Where, in the case of an assessee being an individual the words, brackets and figure Subject to the provisions of sub-section (4), where, in the case of an assessee being an individual or a Hindu undivided family shall be substituted; (ii) after the words period of one year before or , the words two years shall be inserted; (iii) in the Explanation, - (A) clause (i) shall be omitted; (B) in clause (ii), the brackets and figures (ii) shall be omitted; (b) in sub-section (2), for the words one year , the words two years shall be substituted; (c) after sub-section (3), the following sub-section shall be inserted, namely :- (4) The amount of the net consideration which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilised by him 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 by which - (a) the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of the new asset as provided in clause (a) or, as the case may be, clause (b) of sub-section (1), exceeds (b) the amount that would not have been so charged had the amount actually utilised by the assessee for the purchased or construction of the new asset within the period specified in sub-section (1) been the cost of the new asset, shall be charged under section 45 as 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 the unutilised amount in accordance with the scheme aforesaid. Explanation : Where any amount becomes chargeable under section 45 in accordance with sub-section (2) or sub-section (3) or the proviso to this sub-section, then, for the purposes of the deductions to be made under clause (b) of sub-section (1) of section 48, the initial deduction of ten thousand rupees under sub-section (2) of that section shall not be admissible. .