Unlocking Tax Relief: Section 54GB Explained

Relief for Residential Property: Section 54GB offers relief on capital gains from the sale of residential properties, requiring reinvestment in eligible company shares. Investment Avenue: Taxpayers can invest proceeds from property sales into equity shares of eligible companies to qualify for the exemption.

Eligibility Criteria: Only individuals or HUFs can avail of this exemption, with specific conditions on the nature and utilization of assets. Company Criteria: Eligible companies must fulfill certain criteria related to incorporation, business activity, and shareholding/voting rights.

Definition of New Asset: New assets include plant and machinery but exclude certain items like vehicles and previously used machinery. Exemption Calculation: Exemption under Section 54GB is calculated based on the cost of the new asset and the net consideration from the property sale.

Consequences of Transfer: Selling shares or new assets within 5 years results in revocation of the exemption, with taxable gains. Utilizing the CGAS scheme is an option for managing exemptions effectively.