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Tax planning capital gain

vivek (audit assistant) (27 Points)

15 September 2016

I have earned long term capital gain of rs.14 crore by selling my agriculture land in 2016-17.i have purchased agriculture land of rs.1 crore in 2016-17. what amount of tax i required to pay on capital gain?and is there any taxplanning for saving my capital gain tax?

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5 Replies

CA Harshal Totla (Chartered Accountant) (2229 Points)
Replied 15 September 2016

Land is rural or urban?

vivek (audit assistant) (27 Points)
Replied 16 September 2016

urban agricultural land

vivek (audit assistant) (27 Points)
Replied 21 September 2016

urban agricultural land

CA Harshal Totla (Chartered Accountant) (2229 Points)
Replied 24 September 2016

Hi Mr.Vivek, sorry for the late reply. Following course of actions are available in your case:
1) Take exemption u/s 54B- benefit of section 54B is available only to an individual or a HUF. The asset transferred should be agricultural land. The land may be a long-term capital asset or short-term capital asset.
The agricultural land should be used by the individual or his parents for agricultural purpose at least for a period of two years immediately preceding the date of transfer. In case of HUF the land should be used by any member of HUF.
Within a period of two years from the date of transfer of old land the taxpayer should acquire another agricultural land.
2) Take exemption u/s 54F
Gain arising to an individual or HUF from the sale of any Long Term Asset other than Residential Property shall be exempt in full, if the entire net sales consideration is invested in Purchase of one residential house within 1 year before or 2 years after the date of transfer of such an asset or in
Construction of 1 Residential House within 3 years after the date of such transfer
In case the whole sale consideration is not invested and only a part of the sale consideration is invested, exemption shall be allowed proportionately. The above exemption shall be available only when the assessee does not own more than 1 Residential House Property on the date of transfer of such asset exclusive of the one he has bought for claiming exemption under section 54F.
3) Exemption u/s 54EC
The asset transferred should be a long term capital asset and hence there should be a long term capital gain. The assessee has within a period of 6 months after the date of such transfer has invested the capital gain in the long term specified asset being bonds of NHAI and REC. The maximum exemption under this section you can take in a f.y. should not exceed Rs.50Lacs.

CA Harshal Totla (Chartered Accountant) (2229 Points)
Replied 24 September 2016

One thing is not clear in the question, you have mentioned that you have purchased agricultural land in 16-17 for rs.1 crore. Is this the original asset which is transferred by you or it is the asset you have purchased after earning capital gains?