Capital gain on sale of rural agriculture land

This query is : Resolved

Saurabh (Querist)
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03 March 2014 Dear Sir,

My father has sold his rural agriculture land last year and he has invested entire amount to purchase new flat in Delhi/NCR in the name of his wife. Please let me know whether that will come under Income tax or not. Please share your advice urgently.

Regards
Saurabh Saini

Nikhil Kaushik

Nikhil Kaushik (Expert)
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03 March 2014 sale of agriculture land (within the definition of section 2(14) is exempted from capital gains as such land is not considered as capital asset.

any sale from the sale of this flat in future shall be liable for capital gains

Saurabh

Saurabh (Querist)
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04 March 2014 Thanks Nikhil to share your inputs on this. Please let me clear one more point like my father has invested entire amount in purchase of new flat in Delhi/NCR in the name of my mother so will it be ok as far as the Income tax exemption is consider. Please reply..

Nikhil Kaushik

Nikhil Kaushik (Expert)
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04 March 2014 Dear Saurabh,

the income from sale of agriculture land within the definition of 2(14) is totally exempted from tax. there is no need for reinvestment.

where the agriculture land falls within urban area or the within the municipality limits, then you need to reinvest as per section 54B

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