30/05/2026
ONE WORD IN THE NEW INCOME TAX ACT HAS KILLED 54EC BENEFIT FOR DEPRECIABLE ASSETS
Looks like a tiny drafting change. But it may completely change the law
Old law focused on long-term capital "asset"
New law now focuses on long-term capital "gains"
In the famous Dempo Case, Supreme Court held:
Even if Section 50 treats gains on depreciable assets as short-term for computation purposes...
..the underlying asset can still remain long-term.
Hence, 54EC exemption was allowed
But now the wording itself has changed.
Focus shifts from nature of "asset" to nature of "gains"
And under Section 50, those gains are deemed short-term.
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