Sale of Urban Agriculture land, 54B Exemption

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This discussion clarifies Section 54B of the Income Tax Act regarding capital gains from selling urban agricultural land. The user sold land for Rs 45 Lakhs and wants to purchase new agricultural land valued at Rs 25 Lakhs (stamp duty) but purchased for Rs 48 Lakhs. The exemption under Section 54B is limited to the lower of the capital gain amount or the cost of the new agricultural land, including any deposit made under the Capital Gains Account Scheme.

Yash Sunil Darkunde

Yash Sunil Darkunde (Querist)

03 April 2025 Hello, I sold Urban Agriculture land on 1st April, 2025 capital gain arises of Rs 45 Lakhs and I want to purchase new agriculture property new agricultural land which Govt. value i.e stamp value is Rs 25 Lakhs & Purchase consideration is Rs 48 Lakhs so can I claim Rs 45 Lakhs as exemption or not. Please explain. Also, tell any reference of provision/rule for the same.

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

03 April 2025 Yes eligible...
The amount of exemption provided under section 54B shall be lower of-

The amount of Capital Gain arising on transfer or
The cost of new agricultural land including the amount deposited in the Capital Gain Account Scheme.

For details refer::
https://taxguru.in/income-tax/section-54b-exemption-capital-gains-transfer-agricultural-land.html

Message likes : 1 times

Yash Sunil Darkunde

Yash Sunil Darkunde (Querist)

11 April 2025 Thanks sir for help.

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

11 April 2025 You are welcome.

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

29 September 2025 Good luck..