Section 54D → Section 71
Capital gain on compulsory acquisition of lands and buildings not to be charged in certain cases
Quick Answer
Section 54D of the Income Tax Act, 1961 (Capital gain on compulsory acquisition of lands and buildings not to be charged in certain cases) corresponds to Section 71 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 54D
Under the Income Tax Act, 1961, Section 54D governs capital gain on compulsory acquisition of lands and buildings not to be charged in certain cases. Exempts capital gains arising from compulsory acquisition of land/building forming part of an industrial undertaking, if reinvested in another industrial undertaking within 3 years.
Under the Income-tax Act, 2025 (effective 1st April 2026), Section 54D is retained and renumbered as Section 71 of the Income-tax Act, 2025. Retained. Ensures businesses are not penalized with tax when the government takes over their factory land for infrastructure projects.
The transition impact on Section 54D is assessed as Medium. Relief provision for industries affected by eminent domain.
Sec 54D
Provision Summary
Exempts capital gains arising from compulsory acquisition of land/building forming part of an industrial undertaking, if reinvested in another industrial undertaking within 3 years.
Sec 71
Provision Summary
Retained. Ensures businesses are not penalized with tax when the government takes over their factory land for infrastructure projects.
Key Changes & Highlights
- None.
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Frequently Asked Questions
Which subject does Section 54D of the 1961 Act cover?
Section 54D of the Income Tax Act, 1961 covers capital gain on compulsory acquisition of lands and buildings not to be charged in certain cases. Exempts capital gains arising from compulsory acquisition of land/building forming part of an industrial undertaking, if reinvested in another industrial undertaking within 3 years.
What is the new section number for Section 54D under the Income-tax Act, 2025?
Section 54D of the Income Tax Act, 1961 maps to Section 71 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. Ensures businesses are not penalized with tax when the government takes over their factory land for infrastructure projects.
How does the Income-tax Act, 2025 affect Section 54D in practice?
The transition impact for Section 54D is rated Medium. Relief provision for industries affected by eminent domain.
What is new about Section 54D under the Income-tax Act, 2025?
None. These points are specific to Section 54D (Capital gain on compulsory acquisition of lands and buildings not to be charged in certain cases).
Disclaimer: This mapping of Section 54D (Capital gain on compulsory acquisition of lands and buildings not to be charged in certain cases) to Section 71 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 54D is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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