GAMMON INDIA LIMITED
GAMMON INDIA LIMITED
GAMMON INDIA LIMITED
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available in such a case. As per Section 112 of the ITA, taxable long-term capital gains, if any, on<br />
sale of Equity Shares is chargeable to tax at the rate of 20% (plus applicable surcharge and<br />
education cess).<br />
6. As per Section 54EC of the ITA and subject to the conditions and to the extent specified therein,<br />
long-term capital gains (in cases not covered under Section 10(38) of the ITA) arising on the<br />
transfer of a long-term capital asset will be exempt from capital gains tax to the extent such capital<br />
gains are invested in a “long term specified asset” within a period of 6 months after the date of<br />
such transfer. It may be noted that investment made on or after April 1, 2007 in the long term<br />
specified asset by an assessee during any financial year cannot exceed Rs. 50 Lacs.<br />
However, if the assessee transfers or converts (otherwise than by transfer) the long term specified<br />
asset into money within a period of three years from the date of its acquisition, the amount of<br />
capital gains exempted earlier would become chargeable to tax as long-term capital gains in the<br />
year in which the long term specified asset is transferred or converted into money. Further the cost<br />
of such long-term specified asset will not qualify for deduction under section 80C of the act.<br />
A “long term specified asset” for making investment under this Section on or after 1st April 2007<br />
means any bond, redeemable after three years and issued on or after the 1st April 2007 by:<br />
National Highways Authority of India constituted under Section 3 of the National<br />
Highways Authority of India Act, 1988; or<br />
Rural Electrification Corporation Limited, a company formed and registered under the<br />
Companies Act.<br />
7. As per Section 54F of the ITA, long term capital gains (in cases not covered under Section 10(38))<br />
arising on the transfer of the Equity Shares held by an individual or Hindu Undivided Family<br />
(HUF) will be exempt from capital gains tax if the net consideration is utilised, within a period of<br />
one year before, or two years after the date of transfer, in the purchase of a residential house, or for<br />
construction of a residential house within three years. Such benefit will not be available:<br />
if the individual or Hindu Undivided Family-<br />
owns more than one residential house, other than the new residential house, on the date of<br />
transfer of the Equity Shares; or<br />
purchases another residential house within a period of one year after the date of transfer<br />
of the Equity Shares; or<br />
constructs another residential house within a period of three years after the date of<br />
transfer of the Equity Shares; and<br />
the income from such residential house, other than the one residential house owned on the date of<br />
transfer of the original asset, is chargeable under the head “Income from house property”.<br />
If only a part of the net consideration is so invested, so much of the capital gain as bears to the<br />
whole of the capital gain, the same proportion as the cost of the new residential house bears to the<br />
net consideration, will be exempt.<br />
If the new residential house is transferred within a period of three years from the date of purchase<br />
or construction, the amount of capital gains on which tax was not charged earlier, will be deemed<br />
to be income chargeable under the head “Capital Gains” of the year in which the residential house<br />
is transferred.<br />
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