Exemption u/s 54D - Capital Gains - Industrial Land & Building

• Section 54D of the Income Tax Act 1961 prescribes exemption in case of transfer of land or building used for industrial purpose.

• This exemption is available to all types of assessees.

• Exemption is available on compulsory acquisition of land or building of an industrial undertaking which was used by the assessee for industrial purpose in the 2 years immediately preceding the date on which transfer took place.

• The assessee should have purchased any other land or building or constructed any other building for the purposes of re-establishing or shifting the industrial undertaking within 3 years from the date of receipt of compensation. (as clarified in section 54H)

• The capital gain on compulsory acquisition of industrial land or building can be short term or long term.

• Amount of exemption: The amount of capital gains which is exempt shall be the lower of amount of capital gains and cost of industrial land or building.

• The provisions relating to CGAS Scheme and Lock in period are the same as prescribed in section 54 of the Act.