Section 54GB Capital Gains Rollover Relief Calculator
Calculate how much LTCG from selling your home can be saved by investing in an eligible startup under Section 54GB of the Income Tax Act.
Calculate using: Original cost × (CII of sale year ÷ CII of purchase year). CII for FY 2024-25 = 363.
Must be invested before ITR due date. Startup must be DPIIT-recognised. You must hold >50% equity post-investment.
Key conditions:Property must be held for >2 years (LTCG). Startup must be DPIIT-recognised. You (investor) must hold >50% of startup equity post-investment. Startup must deploy funds in new plant & machinery within 1 year. Lock-in: 5 years on shares and plant & machinery.
Based on Section 54GB of the Income Tax Act 1961. LTCG rate: 20% with indexation (pre-Budget 2024 regime). Post-July 2024 Budget, LTCG on property is 12.5% without indexation — consult your CA for the applicable rate. This calculator uses 20% with indexation.
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Frequently asked questions
What is Section 54GB of the Income Tax Act?
Section 54GB allows individuals and HUFs to claim exemption from Long Term Capital Gains (LTCG) on the sale of a residential property, provided the net sale consideration is invested in equity shares of an eligible startup before the due date of filing their income tax return. The invested amount must be used by the startup to purchase new plant and machinery.
How much of the capital gain is exempt under Section 54GB?
The exemption equals the amount invested in the eligible startup, subject to the LTCG amount. If LTCG is ₹50 lakh and you invest ₹40 lakh in the startup, ₹40 lakh is exempt and ₹10 lakh is taxable. If you invest the full LTCG amount or more, the entire gain is exempt.
What is the time limit for investing under Section 54GB?
The investment in startup equity shares must be made before the due date of filing the income tax return for the year in which the property is sold (typically 31 July or 31 October). The startup must then utilise the investment to acquire new plant and machinery within 1 year from the date of subscription.
Does the Section 54GB exemption apply to any startup?
No. The startup must be a company (not an LLP) that holds a valid DPIIT startup recognition certificate. The investor must hold more than 50% of the startup's share capital or voting rights after the investment. The startup must not be engaged in activities that fail the eligibility criteria for startup recognition.
What happens if the startup shares are sold within 5 years?
If the startup transfers the plant and machinery acquired using the invested funds within 5 years, or if the investor's shareholding in the startup falls below 50% within 5 years, the exemption is withdrawn and the previously exempt LTCG becomes taxable in the year of violation.