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capital gain on land

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Richa Garg (Querist)
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26 June 2011 suppose a urban land is sold it generates long term capital gain. in place of it a rural agricultural land is purchased.what will the impact on capital gain if that rural land is sold in one year because rural agricultural land is not capital asset so the earlier exemption should be be taxable. am i correct??

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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26 June 2011 The land is Urban Land or Urban Agriculture Land?
.
I think, it is Urban Agriculture land which is being sold.
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In case you sale new agriculture land against which 54B has been claimed,
from the Cost of Acquisition of New Asset , you have to deduct the Capital Gains Claimed U/s 54B and such reduced value
has to be taken as Cost of Acquisition for calculating the STCG.
But, here , the new agriculture land is not a Capital Asset so provisions of calculation of capital gains are not applicable to it.
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The earlier exemption claimed will not be taxed again, and shall remain "as allowed".

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