Section 54 of Income Tax Act - Description
Dear readers, here we are offering Section 54 of Income Tax Act PDF to all of you. You can claim an exemption under section 54 of the Income Tax Act. Section 54 of the Income Tax Act provides certain relief from capital gains tax to the seller of a residential house or property. You can take advantage of tax exemption even after buying 1 house by selling 2 houses. There are times when a landlord sells a property for the purpose of changing the primary residence. If you have also sold a property recently, then you will have to pay tax on the profit (capital gain) made from it. However, by selling one property, you can save tax by investing in another house property. Under the Income Tax Act, capital gains from the sale of a house are also taxable, but under section 54 of the Income Tax Act, if a person buys another house from this amount within the stipulated time, then the amount invested in the new house is taxable. is deducted from capital gains.
Section 54 of Income Tax Act PDF 2023 Overview
For capital gains, the assets are bifurcated into two major sections:
- Short-term capital assets-
Capital assets that the individual holds for not more than 36 months are called short-term capital assets. The gains from selling these assets are called short-term capital gains.
- Long-term capital assets-
The assets the assessee holds for more than 36 months are called long-term capital assets. The gains from selling these assets are called long-term capital gains.
If unlisted shares, land, or other immovable property are held for more than 24 months, it is considered a long-term capital asset.
The following assets shall be treated as long-term capital assets if are held for more than 12 Months
- Listed securities
- Units of Equity oriented fund
- Zero-coupon bond
For Section 54; the house property should be held for more than 24 months to consider an asset as a long-term capital asset.