Latest Query & Reply

Is there any possibility that investment in bond under section 54EC can be made after expiry of 6 months from date of sale.

Please suggest section or case law pertaining to this as person is ready to invest in bond but statutory limit of 6 months have already expired.

Reply

U/s 54EC, gains arising from the transfer of any capital assets is exempt only if the person within six months invests the capital gain in bond as specified.

However in case of Dr (Smt) Sujatha Ramesh vs Central Board Of Direct Taxes (attached) on 24 October, 2017 the main point debated was the term genuine hardship, which means not fake, counterfeit, real, not pretending. Karnataka High Court found the assessees  genuine hardship valid and reversed the order of the CBDT, allowing the assessee to invest her capital gains and claim exemption u/s 54EC even after expiry of 6 months from the date of transfer of capital asset.

Therefore if the assessee was not able to invest fund u/s 54EC within prescribed time limit due to genuine hardship, exemption can be allowed.