Clause 53 - Relief for rollover of investment asset - Direct Taxes Code Bill, 2009

Relief for rollover of investment asset 53. (1) An individual or a Hindu undivided family shall be allowed a deduction, in respect of rollover of any original investment asset, from the capital gain arising from the transfer of the asset in accordance with the provisions of this section. (2) The deduction referred to in sub-section (1) shall be computed in accordance with the formula A X (B+C+D)/ E Where A = the amount of capital gains arising from the transfer of the original asset; B = the amount invested for purchase or in construction of the new asset within one year before the beginning of the financial year in which the transfer of original investment asset is effected; C = the amount invested for purchase or in construction of the new asset during the financial year in which the transfer of original investment asset is effected; D = the amount deposited in an account in any post office in accordance with the Capital Gains Deposit Scheme framed by the Central Government in this behalf, by the end of the financial year in which the transfer of original investment asset is effected; E = the net consideration received as a result of the transfer of the original asset. (3) The deduction computed under sub-section (2) shall not exceed the amount of capital gains arising from the transfer of the investment assets. (4) Any amount withdrawn from the account under the Capital Gains Deposit Scheme shall be utilised within one month from the end of the month in which the amount is withdrawn, for the purposes of purchase or construction of the new asset. (5) The amount deposited in the account under the Capital Gains Deposit Scheme shall be utilised for the purposes of purchase or construction of the new asset within three years from the end of the financial year in which the transfer of the original asset is affected. (6) The deduction under this section in respect of capital gain arising from an investment asset, specified in column (2) of Table-3, shall be allowed with reference to the corresponding new investment asset referred to in column (3) of the Table, subject to the fulfillment of conditions specified in column (4) therein. Table-3 Deduction in respect of capital gains Sl No. Description of the original investment asset Description of the new investment asset Conditions (1) (2) (3) (4) 1. Agricultural land One or more pieces of agricultural land. The original investment asset was- (i) an agricultural land during two years immediately preceeding the financial year in which the asset is transferred; and (ii) acquired prior to one year before the beginning of the financial year in which the transfer of the asset took place. 2. Any investment asset Residential house. (i) The assessee does not own any residential house, other than the new investment asset, on the date of transfer of the original investment asset; and (ii) The original investment asset was acquired prior to one year before the beginning of the financial year in which the transfer of the asset took place. 3. Any investment asset Deposit in an account maintained under the Capital Gains Savings Scheme (i) The original investment asset was acquired prior to one year before the beginning of the financial year in which the transfer of asset took place; and (ii) The deposit is made within a period of sixty days from the date of transfer of the original investment asset.