Live Course on Drafting of Appeal and Reply of Penalty Notice by CA Sachin Sinha. Register Now!!

Agriculture income

Ajay jangir (no) (124 Points)

13 September 2019

One of my clint sold rural agricultural land and earn gain of rupee 5 lakhs. Since it was not capital assets therefore no capital gain arise but in which section it will be exempt? Please suggest me

Reply
Follow
Share

6 Replies

Kapadia Pravin (17249 Points)
Replied 13 September 2019

Exemption under section 54B can be claimed in respect of capital gains arising on transfer of capital asset, being agricultural land (may be long-term or short-term).

This benefit is available only to an individual or a HUF.

The land should be used for agricultural purpose at least for two years. all the conditions of section 54B need to be satisfied and then assessee can claim the benefit of section 54B by purchasing another agricultural land within the time-limit specified under section 54B.

Ajay jangir (no) (124 Points)
Replied 13 September 2019

Dear sir
This is not my question. I clearly say this is out of capital gain.. I want to ask in which section rural agricultural land will be exempt.

Kapadia Pravin (17249 Points)
Replied 13 September 2019

Same thing I replied.

Capital Gain on Sale of Rural Agri Land will be exempt under 54B subject to conditions as contained in 54B

Ajay jangir (no) (124 Points)
Replied 13 September 2019

Section 54B applied on urban agriculture land.. Not for rural agricultural land its is becouse rural agricultural land out of enter chapter of capital gain.

You reply as per capital gain but I want exempt under which section.. I mean like maturity amount received from lic are tax free under section 10

Pranav Aggarwal (469 Points)
Replied 13 September 2019

U can show in other exempt income and show LTCG on sale of rural agriculture land

since it is not a capital asset

Kapadia Pravin (17249 Points)
Replied 14 September 2019

@ Ajay Jangir

Agricultural Land , so called rural Agri Land
Such Agri Land is not a capital asset and hence no question of capital gain arises.

These provisions are contained in definition section 2(14)(iii) .

Agri Land meeting criterias contained in 2(14)(iii) are not regarded as capital asset and hence gain is exempt.