Section 54ED of ITA, 1961 : Section 54Ed: Capital Gain On Transfer Of Certain Listed Securities Or Unit Not To Be Charged In Certain Cases

Explanation using Example

Let's say Mr. Gupta sold his listed shares in a company, which he held for more than a year, on June 1, 2005, for Rs. 1,00,000. The long-term capital gain from this sale was Rs. 40,000. To save on capital gains tax, within six months, he invested Rs. 40,000 in the equity shares of XYZ Ltd., which was an eligible issue of capital as it was offered to the public by a public company registered in India.

According to Section 54ED:

• If Mr. Gupta invested the entir...

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