Section 54D - Exemption from Capital Gain on Compulsory Acquisition of Land or Building forming part of Industrial Undertaking



Quick Summary
Section 54D of the Income Tax Act, 1961, offers an exemption from capital gains tax when land or buildings used for an industrial undertaking are compulsorily acquired. To qualify, the compensation received must be reinvested within three years in purchasing or constructing new land or buildings for re-establishing or setting up another industrial undertaking. There's a three-year lock-in period for the new asset, and failure to adhere to these conditions can lead to the withdrawal of the exemption.

Did you know that there will be capital gain on account of compensation received on such compulsory acquisition of Land or Building which was used by the assessee for the purpose of his business.? Not only that, the assessee would also be liable to pay capital gain tax on the capital gain earned.
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