Section 11 – Income from Property Held for Charitable or Religious Purposes
- Blog|Income Tax|
- 3 Min Read
- By Taxmann
- Last Updated on 29 January, 2021
When a capital asset which was held under trust wholly for a charitable or religious purpose is transferred and whole or a part of the net consideration is being utilized to acquire any other capital assets to be held for the same purpose, then the capital gain arising from the transfer of such an asset shall deemed to have been applied to charitable or religious purposes to the following extent- 1. When the whole of net consideration is utilized in acquiring the new capital asset, the whole of such capital gain. 2. Where only part of net consideration is utilized for acquiring the new capital asset,then only such capital gain shall be exempted which will be equals to the amount by which the cost of new asset exceeds the cost of the transferred asset. For example: If cost of the asset transferred was Rs. 20 lakhs and the amount of capital gains is Rs. 10 lakhs. The new asset is acquired for Rs. 25 lakhs then the amount of capital gain which will be exempt shall be computed as: Capital Gain to be exempt = Cost of new asset – cost of transferred asset I.e. Rs. 25 lakhs – Rs. 20 lakhs = Rs. 5 Lakhs
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