IF AN ASSESSEE SOLD AGRICULTURE LAND FOR 1 CRORE WHERE CAPITAL GAIN IS 60 LAKH FOR 54B EXEMPTION HE MADE AN AGREEMENT ON 100 RUPEES STAMP TO BUY ANOTHER AGRICULTURE LAND FOR RS. 1.40 CRORE AND PAID AN ADVANCE OF RUPEES 40 LAKH BUT AFTER 4 NOTICES RECEIVED FOR NON PAYMENT OF BALANCE AMOUNT 40 LAKH IS FORFEITED CAN HE CLAIM EXEMPTION OF 40 LAKH U/S 54B OR IS THERE ANY WAY TO SAVE CAPITAL GAIN
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Capital gain
Replies (1)
sale of agricultural land is exempt from capital gain as it is exempted in the capital asset definition. However if such agricultral land is in urban area then capital gains arises.
Such capital gains can be invested in similar agricutlral land for claiming exemption. However in my opinion you need to hold the asset for 3 years. If for any reason you are not able to hold the asset then the exemption cannot be claimed and it becomes capital gains in the year in which the asset is not in control of the assessee.
In depth analysis is required, i have stated only what i can remember
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