## Exemptions from Capital Gains — Sections 54, 54B, 54D
The Income-tax Act provides several exemptions where capital gain is exempt if reinvested in specified assets within prescribed time-limits. Below is a comparative chart of the three foundational exemptions.
### Comparative Table
| Particulars | Section 54 | Section 54B | Section 54D |
|---|---|---|---|
| Eligible Assessee | Individual / HUF | Individual / HUF | Any Person |
| Asset Transferred | Residential House Property (LTCG only) | Urban Agricultural Land (STCG / LTCG) — used for agriculture for 2 years preceding | Compulsory acquisition of Land & Building of industrial undertaking (STCG / LTCG) |
| Asset in which Gain is Invested | One Residential House in India (If CG ≤ ₹2 crore, two houses allowed — once in lifetime) | Agricultural Land (urban or rural) | Land & Building for industrial purposes |
| Time Limit for Investment | Purchase: 1 year before or 2 years after transfer; OR Construct: within 3 years from transfer | Within 2 years from date of transfer | Within 3 years from date of transfer |
### Common Rules across all three sections
- Quantum of Exemption = Lower of (Capital Gain) or (Amount Invested)
- Lock-in Period: If new asset is transferred within 3 years (5 years for 54D) of its acquisition, the exemption is reversed by reducing COA of new asset (so larger STCG arises on its sale)
- Capital Gains Account Scheme (CGAS): If investment is not made before the due date of filing return, the unutilised amount must be deposited in CGAS before the due date u/s 139(1) to claim exemption
- For Section 54, the limit of investment is ₹10 crore (post Finance Act, 2023 amendment)
### Section 54 — Special Two-House Option
Individual / HUF may invest in 2 residential houses in India if:
- Capital Gain ≤ ₹2 crore, AND
- The option is exercised only once in a lifetime
### Section 54B — Agriculturist Protection
Only urban agricultural land is a capital asset (rural agricultural land is not even a capital asset, so no gain arises). The exemption is for individual/HUF who used the land for agriculture personally or through parents for 2 years preceding transfer.
### Section 54D — Industrial Undertaking
Applies only to compulsory acquisition of L&B used for industrial undertaking. Available to any person (not just Individual/HUF). The industrial use must be for 2 years preceding the date of compulsory acquisition.