Sec 54B: incomes from capital gain.

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Sai Kiran Reddy (Querist)

17 September 2017 Details of the Provision: If the assessee transfers urban agriculture land,which was been used by the assessee or his parents or his children for the agriculture purpose for a period not less than 2 years,and if invests the resultant capital gain in the purchase of an agriculture land,then the capital gain invested shall be exempted u/s:54B only if he stratifies some conditions. MY QUERY:One of the conditions to be satisfied for claiming the exemption is that the assessee shall hold the land so purchased for a minimum period of 3yrs. IF ASSESSEE HAS CLAIMED EXEMPTION BY PURCHASING RURAL AGRICULTURE LAND(I.E SITUATED IN NON SPECIFIED AREA) THERE AFTER IF HE SELL THE LAND SO PURCHASED BEFOR EXPIRY OF 3YRS FROM THE DATE OF TRANFER,THEN WHAT WOULD BE THE CONSEQUENCE FOR EARLIER EXEMPTED C.G AS HE DIDN'T SATISFY THE REQUIRED CONDITION?

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)

17 September 2017 Whn he sale such land then STCG is levied over it. During calculation of STCG exemption claimed u/s 54B is deducted from cost of acquisition. Consequently STCG increases by amt of exemption claimed u/s 54B earlier.

Sai Kiran Reddy

Sai Kiran Reddy (Querist)

17 September 2017 THANK YOU FOR REPLY! BUT I THINK RURAL AGRICULTURE LAND IS NOT A CAPITAL ASSET ACCORDING TO SEC.2(14).AS HE SOLD RURAL ARICULTURE LAND,DOES IT AMOUNTS TO TRANSFER?

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CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)

17 September 2017 No Rural agriculture is not asset. But an exemption claimed by you is in respect of urban land. So you have to pay tax on such amt.

Sai Kiran Reddy

Sai Kiran Reddy (Querist)

17 September 2017 THANK YOU FOR EXPLANATION. IT'S HELPFUL

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CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)

17 September 2017 Welcome..... Pleasure is mine

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