HAS EXEMPTION BE OBTAINED ON LONG TERM CAPITAL GAINS BY INVESTING IN BONDS OR DEBENTURES?
Yes, but the investment must be in notified Bonds or . Debentures. Under earlier provisions, long term capital gains were exempt from tax where the net consideration received or accruing on transfer of a capital asset was invested or deposited in specified financial assets. This exemption ceased to be available in respect of assets transferred after 31.03.92. In order to provide an input to investment in priority sectors of the economy, with effect from 1st October, 1996, a new section 54EA has been inserted having the following salient features: – 1)Exemption from capital gains is now available in cases where investment in specified bonds or debentures is made, before 1 st April, 2000, out of the net consideration received or accruing from the transfer of the capital asset. The bonds and debentures, re-investment in which will qualify for exemption, are notified by the Central Board of Direct Taxes; 2)Where only part of the net consideration is invested in specified bonds or debenture
