Capital Gain Exemption in respect of capital Gain of under Section 10 (37) & (38)

Capital Gain Exemption in respect of capital Gain of under Section

10(37)                                                                          10(38)                         

            Urban Agriculture Land                                        Specified  Securities

                                                                                        

   

Following income shall not include while computing the total income of previous year of any person:

10(37)- Exemption in respect of capital Gains in case of Urban Agricultural Land:-

Exemption is available if the following conditions are cumulatively satisfied:

   Ø    Assessee being an individual or HUF

   Ø  transferred the agricultural land situated in urban area.

   Ø  used for agricultural purposes by such HUF or individual or a parent of the individual during the period of two year immediately preceding the date of transfer.

   Ø  The transfer takes place by way of compulsory acquisition under any law or the transfer is the one for which the consideration is determined or approved by the central govt, or RBI.

   Ø  Capital gains computed with reference to original compensation are exempt.

   Ø  Capital gains whether long term or short term exempts.

10(38)-Exemption in respect of long term capital gains in case of specified securities:-

Any income arising from

   Ø  The transfer of long term capital asset

   Ø  Being a equty share in a company or

   Ø  A unit of an equity oriented fund or units of a business trust where

   Ø  The transaction of sale is chargeable to STT (Security transaction TAX).

Note:

   1.      Exemption is available for all assesses whether resident or non-resident, FII etc.

   2.      Exemption is available for all shares/ units held as capital assets and not as stock in trade.

   3.      STT is paid on sale of equity shares or units of business trust on stock exchange. STT is paid on sale of unit o equity oriented fund on stock exchange or directly to the mutual fund.

   4.      STT is paid on sale of unlisted equity shares by holders such shares under the offer for sale to public offer and where such share are subsequently listed on a stock exchange.

   5.      Added by Finance Act, 2015: STT is paid on sale of unlisted units of a business trust by any holder of such units which were acquired in consideration of a transfer referred to in clause (XVII) os sec 47 of the Income tax Act, 1961 under an offer for sale to the public included in an initial offer and where such units are subsequently listed on a recognised stock exchange.

   6.      The acquisition of shares/ units need not be through stock exchange.

   7.      LTCL referred to in section 10(38) cannot be set-off or carried forward.