Section 54H of ITA, 1961 : Section 54H: Extension Of Time For Acquiring New Asset Or Depositing Or Investing Amount Of Capital Gain

Explanation using Example

Imagine Mr. Sharma owned a piece of land that was compulsorily acquired by the government for a highway project. The acquisition happened on January 1, 2022, but he didn't receive the compensation until July 1, 2022. According to Section 54H of the Income-tax Act, 1961, the period within which Mr. Sharma must invest the compensation amount in a new property (to claim exemption from capital gains tax) would start from July 1, 2022, the date he received the compensation, rather than January 1, 2022, the date of acquisition.