income taxable under capital gain

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Saurabh Sharma (Querist)
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24 November 2009 Dear friends,

i want to know that i sale a agriculture land which was after purched come within 8 kames of minicipal limits and hence categorized as urban land. now i sale that and invest the amount in purchase of new agriculture land. will i get the exemption of section 54b. please mention any case law on that?

Aditya Maheshwari

Aditya Maheshwari (Expert)
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24 November 2009 â€˜Landâ€™ need not be â€˜agricultural landâ€™ - The exemption under section 54B is available to the seller of â€˜a capital asset being landâ€™. It does not restrict the benefit to agricultural land only. However, the land against which the benefit is sought must have been used by the assessee or his parent for agricultural purpose in the two years immediately preceding the date of sale - CIT v. Smt. Savita Rani [2003] 133 Taxman 712/[2004] 270 ITR 40 (Punj. & Har.).

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