Section 54EE was introduced in Income Tax Act, by Finance Bill 2016 which was on similar line with section 54EC where people would get exemption from capital gain of upto Rs. 50 lakh if they invest in bonds/ funds/ units specified under the section.
The bonds/ funds/ units specified in the above section were basically start-up funds which were to be announced by Central government and same was mentioned in memorandum of Finance bill as:
“a new Section 54EE to provide exemption from capital gains tax if the long term capital gains proceeds are invested by an assessee in units of such specified fund, as may be notified by the Central Government in this behalf, subject to the condition that the amount remains invested for three years failing which the exemption shall be withdrawn. The investment in the units of the specified fund shall be allowed up to Rs. 50 lakh”
Thus as per section 54EE if a person earn capital gain from any long term capital asset and he invest the whole or any part of capital gains in the long-term specified asset then he will get the exemption of capital gain or amount invested in specified asset whichever is lower but maximum investment with regard to an asset can only be upto 50 lakh in a year and next financial year and investment needs to be made on or after 01.04.2016.
An assessee cannot accept loan against the above investment and cannot transfer the above asset for 3 years.
“long-term specified asset” means a unit or units, issued before the 1st day of April, 2019, of such fund as may be notified by the Central Government in this behalf.
Thus, as per above definition the Long term specified asset should be issued before 01.04.2019 and till date no unit has been issued thus this section is of no use now and it was just an exemption for name sake wherein no units have been announced by government.
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