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Section 54GB of the Income Tax Act exemptions on capital gains from the sale of residential property if the proceeds are invested in startup firm equity shares. This exemption was created to provide assistance to an individual or HUF that want to establish or start a business by selling a residential property.
Note – If the amount is not used within one year of subscription, it will be charged as assesse (Individual/HUF) income in the preceding year in which the one-year period expires, and the firm will be allowed to remove the amount from the deposit plan.
Note: A 3 restriction applies to computers and computer software acquired by qualifying start-ups.
Conditions of Claiming Exemption | EXEMPTION AMOUNT |
If Net consideration > Cost of New Asset | Cost of new asset * Capital Gain/Net Consideration |
If Net consideration <= Cost of New Asset | Capital Gain |
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