Section 54H of Income Tax Act for AY 2023-24

Notes on Section 54H of Income Tax Act 1961. Extension of time for acquiring new asset or depositing or investing amount of capital gain.

Amended and updated notes on section 54H of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to extension of time for acquiring new asset or depositing or investing amount of capital gain.

Chapter IV (Sections 14 to 59) of the Income Tax Act 1961 deals with the provisions related to computation of total income. Section 54H of IT Act 1961-2023 provides for extension of time for acquiring new asset or depositing or investing amount of capital gain.

Recently, we have discussed in detail section 54GB (exemption of capital gains on transfer of assets in cases of shifting of industrial undertaking from urban area to any Special Economic Zone) of IT Act 1961. Today, we learn the provisions of section 54H of Income-tax Act 1961. The amended provision of section 54H is effective for financial year 2022-23 relevant to the assessment year 2023-24.

In this article, you will learn detail of the provisions of section 54H of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962, regulations, notifications, circulars, orders and Press Release by CBDT, Income Tax Department and the Ministry of Law and Justice, Government of India.

Section-54H: Extension of time for acquiring new asset or depositing or investing amount of capital gain

Notwithstanding anything contained in sections 54, 54B, 54D, 54EC and 54F, where the transfer of the original asset is by way of compulsory acquisition under any law and the amount of compensation awarded for such acquisition is not received by the assessee on the date of such transfer, the period for acquiring the new asset by the assessee referred to in those sections or, as the case may be, the period available to the assessee under those sections for depositing or investing the amount of capital gain in relation to such compensation as is not received on the date of the transfer, shall be reckoned from the date of receipt of such compensation

Provided that where the compensation in respect of transfer of the original asset by way of compulsory acquisition under any law is received before the 1st day of April, 1991, the aforesaid period or periods, if expired, shall extend up to the 31st day of December, 1991.


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