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Ltcg on sale of urban agricultural land

sahil (nil) (48 Points)

25 July 2014

Hello

We have sold ancestral agricultural land in corporation area for 1800000,on march 2014. Govt. valuater made price 140000 as on 1-4-1981, tax advisor told to invest total sale amount in capital gain bonds. we r in need of money. is it necessary to invest complete amount or some amount?

Please let us know.or other way to get through it. My job salary is 200000/-. so what r options to save long term capital gain tax for sale of agri land we r not planning to buy other agri land. & can i invest in 54EC bonds or not, also let me know sec 54, 54EC, 54 F which are applicable for sale of urban agri. land

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Mihir (Wealth Manager) (5293 Points)
Replied 25 July 2014

You are first required to compute the LTCG. Only the LTCG and not the total sale consideration is to be reinvested. You may invest in bonds u/s 54EC. If you are in need of some money, you may have the agreement value matching the stamp value, and you may take the difference between agreement value and actual sale value in cash.

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