Investment under section 54EC on Short term capital gain on depreciable asset

No.

Deduction under 54EC is available only in case of sale of land or building.

Hi

No. No exemption can be claimed for capital gains on sale of depreciable assets.

Such capital gains are short term capital gains always chargeable to tax.

Hi,

Hope you are doing well !!

No, the deduction under section 54EC can not be claimed.

With effect from financial year 2018-2019, the exemption available under section 54EC of the Income Tax Act, 1961 has been restricted only in case of capital gain arising from transfer of long term capital assets being transfer of land or building or both. It must be noted here that, earlier exemption was available on transfer of any assets, however, with effect from the financial year 2018-2019 exemption under section 54EC is available only in case of transfer of long term capital assets being land or building or both;

In case of any depreciable assets on which depreciation has been allowed under the Income tax act, it would be a short term capital gain and hence, no exemptions.

Section 54 deductions are only applicable for long term capital gains.

No.

According to section 50 of Income tax act if an assessee has sold a capital asset forming part of block of assets (building, machinery etc) on which the depreciation has been allowed under Income Tax Act, the income arising from such capital asset is treated as short term capital gain.

Dear Sir,

Yes, you can claim deduction from LTCG on sale of land.

Provisions of section 50 cannot be invoked in case of sale of land since land is not a depreciable asset & it cannot form part of block of assets in absence of rate of depreciation having been prescribed.

If land is held for a period of more than 24 months, then excess of sale price over indexed cost of acquisition of land is to be taxed as long-term capital gain.

If it's sale of land and building then you can claim exemption u/s 54EC even if it was depreciable asset.

Yes you are right there are many ITAT and high court decision which support your contention.

If you need any further clarification or assistance you can call me.

Yes, there have been many case rulings on the issue. However, it is still debatable and invites litigation.

Although it's recommended to pay the taxes as applicable on STCG but taking a aggressive decision, you may claim 54EC exemption.

Yes, you are right.

You can claim it subject to litigation. 

You can go through the below link- Contradictory opinion.

https://www.taxpublishers.in/Ency_DT/DT_Judg_Show?221N0423?a0

Section 50 is a deeming fiction. It can be discussed in length before considering it as a long term. As building consists of land and superstructure, in which land (Non-depreciable asset) is an integral part of the building. It also depends on case to case basis. Judgements of High court will be more crucial as jurisdictional AO's are bound by them.

Deduction under section 54EC can be claimed:

To be a matter of litigation because of different rulings from high courts and Income Tax (I-T) tribunals.

The most common view, however, is that treat the same as short term capital assets and pay the applicable taxes.

Hi

Sec 54EC is available on sale of long term capital asset,being land and building ,So in this case ,you can claim exemption under 54EC.

Hope it helps