54f and 54b

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CA Birju Ruchir Desai

CA Birju Ruchir Desai (Querist)
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10 August 2011 On sale of Urban Agriculture land can an assessee take the benifit of both Section 54F and 54B togather.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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10 August 2011 You have sold a land for 50.00 lac.
Capital Gain is 40.00 lac.
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You have to ascertain first - Whether the land has been used for the purpose of Agriculture within the 2 preceding years.
Now you purchase an agriculture land of Rs. 20.00 lacs. 54B will exempt half of your capital gain.
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Now 20.00 lac CG is still taxable.
You Opt Section 54F.
Here you have to proportionately invest Rs 25.00 lac to get exemption of CG of 20.00 lac.
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The Gain which is arising on the Agriculture land should be of a Long Term Capital Asset ( 3 years holding).
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In that way you can get exemption in both the sections.
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Pl hav views of experts also.

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