Tax Exemption When Shifting of Industrial Undertaking from Urban Areas [Sec54G]

As per section 54G of the Income Tax Act, 1961, where any capital gain arises from the transfer of a capital asset, being machinery or plant or building or land or any rights in building or land used for the purposes of the business of an industrial undertaking situated in an urban area, effected in the course of, or in consequences of, the shifting of such industrial undertaking to any other area (other than urban area).

  • Conditions
  1. A capital asset used for industrial undertaking located in urban areas is transferred
  2. Transfer of asset take place to areas other than urban areas
  3. The assess within a period of one year before or 3 years after the date on which asset took place ;
    1. Purchased a new plant
    2. Acquired or construct building or land for business purpose
    3. Shifting the original asset and transfer the establishment of such undertaking to such area
    4. Incurred expenses on such purpose as may be specified
  • Exemption:-
  1. The amount of capital gain generated on transfer of capital asset
  2. Cost and expenses incurred in 9(a) to (d)
  • Asset is transferred within 3 years;-

    If the asset is transferred with in a period of 3 years the amount exempted earlier will be taken back

  • Scheme of deposit:-

    If amount is not utilized before due date of submission of return, them it should be deposited in a capital gain deposit scheme.

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