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CS Professional · Advanced Direct Tax Laws and Practice · Income Tax Implication on Specified Transactions

Under the Income-tax Act, 2025 (applicable from the June 2027 session), a non-resident Indian earns long-term capital gains on transferring a foreign exchange asset. The capital gain is exempt from charge under section 215 only if the net consideration is invested in a specified asset within which period after the date of transfer?

The investment must be made within six months after the date of transfer of the foreign exchange asset. Section 215(1)(b) of the Income-tax Act, 2025 sets this window for the NRI to claim the capital gains exemption on reinvestment in a specified asset.

  1. AThree months
  2. BSix monthsCorrect
  3. COne year
  4. DTwo years

Explanation

Section 215(1)(b) requires the investment of the whole or part of the net consideration in a specified asset within six months after the date of transfer. Three months, one year and two years do not appear in the provision.

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