Can Capital Gains be deferred or postponed?

In India, capital gains on the sale of certain assets can be deferred or postponed under specific circumstances. Here are a few provisions that allow for deferral or postponement of capital gains:

1. Section 54: Under Section 54 of the Income Tax Act, if an individual sells a residential property and invests the proceeds in purchasing another residential property within a specified time frame, the capital gains can be exempted. This provision allows for the deferral of capital gains tax.

2. Section 54F: Similar to Section 54, Section 54F provides for the exemption of capital gains arising from the sale of any longterm capital asset (other than a residential property) if the sale proceeds are utilized to purchase a residential property. The time frame and other conditions need to be met to avail of the exemption.

3. Section 54EC: Under Section 54EC, an individual can defer the payment of capital gains tax by investing the capital gains in specified bonds issued by the National Highway Authority of India (NHAI) or the Rural Electrification Corporation (REC) within six months from the date of sale.

It's important to note that these provisions have specific conditions and limitations, including the type of assets, time frames, and investment requirements. It's advisable to consult with a tax professional or refer to the Indian tax authorities for detailed information regarding the deferral or postponement of capital gains and the specific provisions applicable to your situation.