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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Taxation of Other Products

Mr. Sameer Joshi, a resident individual, sold a commercial plot acquired in FY 2015-16 and earned a long-term capital gain of Rs 60,00,000. He wants to claim exemption by investing in specified bonds. Under Section 54EC as taught in NISM X-B, what is the maximum amount of exemption he can obtain in a financial year?

The maximum exemption is Rs 50 lakh, obtained by investing in specified 54EC bonds within 6 months of the transfer. The cap is Rs 50 lakh per financial year, so the Rs 60 lakh gain cannot be fully exempted through this route.

  1. ARs 50,00,000 invested in specified bonds within 6 monthsCorrect
  2. BRs 60,00,000 invested within 12 months
  3. CRs 1,00,00,000 invested within 6 months
  4. DRs 10,00,000 invested within 3 months

Explanation

Section 54EC allows exemption on long-term gains from land or building if invested in specified bonds (NHAI/REC etc.) within 6 months of transfer, capped at Rs 50 lakh per financial year. Investing the whole Rs 60 lakh therefore gives exemption only up to Rs 50 lakh. The other options misstate the limit or time.

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