Section 54G of ITA, 1961 : Section 54G: Exemption Of Capital Gains On Transfer Of Assets In Cases Of Shifting Of Industrial Undertaking From Urban Area

Explanation using Example

Imagine a company, XYZ Industries, that has been operating a manufacturing plant in an urban area of Mumbai. Due to city planning and environmental regulations, the company decides to relocate its plant to a rural area in Maharashtra. In the process, XYZ Industries sells its urban land and building, which results in a significant capital gain.

Under Section 54G of the Income-tax Act, 1961, XYZ Industries can avail tax relief on this capital gain if it fulfills certain conditions. Within one year before or three years after the sale, the company:

1. Purchases new machinery for the relocated plant;
2. Acquires...

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