capital gain is imposed on such land or not

Capital Gains on transfer of agricultural land [Section 54B]

Eligible assessee – Individual & HUF

Conditions to be fulfilled

1.There should be a transfer of urban agricultural land.

2.Such land must have been used for agricultural purposes by the assessee, being an individual or his parent, or a HUF in the 2 immediately preceding years.

3. He should purchase another agricultural land (urban or rural) within 2 years from the date of transfer.

Quantum of exemption

• If cost of new agricultural land ≥ capital gains, entire capital gains is exempt.

• If cost of new agricultural land

If you purchased a house, then exemption will allowed under section 54F of the Act.

Provided Capital gain is Long ter capital gain on transfer of long term capital Asset.

Capital gains in cases of investment in residential house [Section 54F]
Eligible assessees: Individuals / HUFs

Conditions to be fulfilled • There must be transfer of a long-term capital asset, not being a residential house.
• Transfer of plot of land is also eligible for exemption
• The assessee should -
♦ Purchase one residential house situated in India within a period of 1 year before or 2 years after the date of transfer; or
♦ Construct one residential house in India within 3 years from the date of transfer.
• The assessee should not own more than one residential house on the date of transfer.
• The assessee should not –
♦ purchase any other residential house within a period of 2 year or
♦ construct any other residential house within a period of 3 years
from the date of transfer of the original asset.

Quantum of exemption
• If cost of new residential house ≥ Net sale consideration of original asset, entire capital gains is exempt.
• If cost of new residential house < Net sale consideration of original asset, only proportionate capital gains is exempt i.e.
LTCGXAmount invested in new residential house/Net sale consideration