Sec 54H : Extension of time limit for acquiring new asset or depositing or investing amount of capital gain, in case of compulsory acquisition. - Income Tax - Ready Reckoner - Income Tax

Sec 54H : Extension of time limit for acquiring new asset or depositing or investing amount of capital gain, in case of compulsory acquisition There may be a time lag between the previous year in which the asset is compulsorily acquired and the previous year in which the compensation is actually received. As per section 54H, the period for acquiring the new asset by the assessee referred to in sections 54, 54B, 54D, 54EC and 54F (i.e. six months, one year before or two/three years after the date of transfer of the asset) shall be reckoned from the date of receipt of such compensation and not from the date on which the asset was originally transferred. Therefore, in the case of transfer by way of compulsory acquisition by the government, the period of one year before or two years or three years for acquiring the new asset shall commence from the date of receipt of the compensation and not from the date of acquisition. Similarly, deposit under the Capital Gains Accounts Scheme may be made in the previous year in which the compensation is received or till the due date of filling the return of income of the previous year in which the compensation is received. IMPORTANT NOTE:- The extension of time as per section 54H is not available for section 54G/54GA.