As per the existing provisions of Section 54GB, long term capital gains are exempted on account of transfer of residential property, if the proceeds are invested in subscription of shares of a MSME company, subject to other conditions specified therein

It is proposed to amend Section 54GB so as to widen the scope of exemption, which is as follows:-

– Long term capital gains arising on account of transfer of residential property shall be exempt in the hands of individual or HUF if proceeds are invested in subscription of shares of aforementioned eligible start-ups

The exemption shall be available only if individual or HUF holds more than 50% of shares of such start-ups and the start-ups shall utilise the invested funds to purchase new asset before the due date of filing of return of the investor

– New asset shall include computers or computer software in case the start-up is technology driven start-up as certified by Inter Ministerial Board of Certification, notified by Central Government

These amendments will take effect from 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017-18 and subsequent assessment years

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