Section 54EE of Income Tax Act "Capital gain not to be charged on investment in units of a specified fund"
54EE. (1) Where the capital gain arises from the transfer
of a long-term capital asset (herein in this section
referred to as the original asset) and the assessee has, at
any time within a period of six months after the date of
such transfer, invested the whole or any part of capital
gains in the long-term specified asset, the capital gain
shall be dealt with in accordance with the following
provisions of this section, namely:-
(a) if the cost of the long-term specified asset is not less
than the capital gain arising from the transfer of the
original asset, the whole of such capital gain shall not be
charged under section 45;
(b) if the cost of the long-term specified asset is less
than the capital gain arising from the transfer of the
original asset, so much of the capital gain as bears to the
whole of the capital gain the same proportion as the cost of
acquisition of the long-term specified asset bears to the
whole of the capital gain, shall not be charged under
section 45:
Provided that the investment made on or after the 1st day
of April, 2016, in the long-term specified asset by an
assessee during any financial year does not exceed fifty
lakh rupees:
Provided further that the investment made by an assessee in
the long-term specified asset, from capital gains arising
from the transfer of one or more original assets, during the
financial year in which the original asset or assets are
transferred and in the subsequent financial year does not
exceed fifty lakh rupees.
(2) Where the long-term specified asset is transferred by
the assessee at any time within a period of three years from
the date of its acquisition, the amount of capital gains
arising from the transfer of the original asset not charged
under section 45 on the basis of the cost of such long-term
specified asset as provided in clause (a) or, as the case
may be, clause (b) of sub-section (1) shall be deemed to be
the income chargeable under the head "Capital gains"
relating to long-term capital asset of the previous year in
which the long-term specified asset is transferred.
Explanation 1.-In a case where the original asset is
transferred and the assessee invests the whole or any part
of the capital gain received or accrued as a result of
transfer of the original asset in any long-term specified
asset and such assessee takes any loan or advance on the
security of such specified asset, he shall be deemed to have
transferred such specified asset on the date on which such
loan or advance is taken.
Explanation 2.-For the purposes of this section,-
(a) "cost", in relation to any long-term specified asset,
means the amount invested in such specified asset out of
capital gains received or accruing as a result of the
transfer of the original asset;
(b) "long-term specified asset" means a unit or units,
issued before the 1st day of April, 2019, of such fund as
may be notified by the Central Government in this behalf.