Now Time has come to be ready to file income Tax return for the Assessment Year 2020-21, however there are lot of changes have been made by the Government.

Some changes are more important to know because Income tax Return cannot be filed correctly if are ignorant of these.

I am just making an effort to cover such amendments/changes in a series like what would be Tax Rate for the Assessment year , changes in particular source of income i.e.salary, house property, Business or profession, capital etc.

So far I have covered the changes which are made in exempt income, salary income, house property income and income from business or profession, now going to explain the changes which are applicable in "Capital Gain".i.e. profit or loss which arise when someone sale any capital asset.

Earlier part of the article you can access by clicking following links:-

(1 ) Rate of Income Tax for the Assessment year 2020-21 (Read Part -1 here)

(2)"Exempt income" i.e. Income which do not part of Total Income (Read Part -2 here)

(3) Changes in the head "Income from Salary" (Read Part -3 here)

(4) Changes in "Income from House Property" (Read Part-4 here )

(5) Changes in "Profits or gains from Business or profession (Read Part-5)

Profit or gain from Capital Gain

Deduction of Long Term Capital Gains for Two Residential House Properties u/s. 54

If you have sold any residential House property in previous year and earned the profit on sale of such house, you are required to pay tax on such profit however a deduction under section 54 can be claimed in respect of such capital gains if it long-term capital gain.

This benefit is available only to an individual or HUF.

The benefit can be claimed by purchasing or by constructing a residential house within a specified period

Upto AY 2019-20, the benefit of deduction u/s. 54 against the capital gain was restricted to the investment made in only one residential house in India.

From A.Y. 2020-21 onwards, the benefit of section 54 is extended, at the option of the taxpayer , to investment made in two residential house properties. However, this benefit can be availed only if the amount of such long term capital gains does not exceed ₹ 2,00,00,000/-.

Further, if the assessee exercises this option, he shall not be entitled to exercise this option again for the same or any other assessment year. In other words, this benefit of deduction for investment in two residential houses can be availed of only once in the lifetime of an assessee.

Extension of period for xemption from capital gain arising on sale of a residential house if capital gain2019 is invested in start-ups Section 54GB:

Section 54GB provides for exemption from capital gain arising on sale of a residential house; in case the net consideration arising from sale of a residential property made upto 31.3.2019 is invested in start-ups.

Amendment is made in the section to cover within its ambit cases where the property is sold upto 31.03.2021 (from 31.03.2019).

Thus, a person who has sold specified asset during Financial Year 2019-20 can also avail the deduction under this section in his return of income of AY 2020-21.

Further the requirement of holding more than fifty per cent share capital or voting rights in the eligible company is reduced to twenty five per cent.