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Capital gain-agrictural land & exemption 54

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This query is : Resolved

CA.S.KARTHIKEYAN

CA.S.KARTHIKEYAN (Querist)

22 March 2012 An Rural agricultural is convert into Number of Plots and sold to various person for their construction purpose . We can set off the capital gain gain By Purchasing another new agricultural land and we can claim exemption under section sec 54 B for it ..

CA VENKATA RAMANA

CA VENKATA RAMANA (Expert)

22 March 2012 yes we can claim exemption u/s54B of Income tax Act

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

22 March 2012 1)The rural agricultural land referred in the query is a 'capital asset' or not has to be checked. If it is a capital asset, then only question of 54B arises.
2) Whether the gain on sale of agricultural land converted into house plots is capital gain or business income is a vexed issue.
My understanding is ,it is a business income and,therefore, no need to think about 54B.

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