Section 115F(1) — the law in short
What the courts have decided on section 115F(1), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Statutory position — s.115F: the six-month rollover of net consideration into a specified asset, the proportionate formula where only part is reinvested, and the three-year lock-in
CBDT Circulars & InstructionsCuts both ways
My NRI client sold debentures of an Indian public company that he had subscribed to in foreign exchange, and put most but not all of the money into fresh shares of an Indian company within four months. How much of the gain escapes tax, and what happens if he sells the new shares in two years' time?
The exempt part is the same proportion of the capital gain as the cost of the new asset bears to the NET CONSIDERATION — not to the gain — so a partial reinvestment shelters a strictly proportionate slice. If he transfers or converts the new asset into money within three years of acquiring it, the amount not charged under section 45 is deemed to be his long-term capital gains of the previous year in which that happens.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.
