Capital Gain Planning

I THINK BEST CAPITAL PLANNING WILL BE U/S 54B .IN THIS SECTION TO GET THE EXEMPTION  ANOTHER  AGRICULTURE LAND IS PURCHASED (MAY BE RURAL OR URBAN) COSTING EQUAL TO AMOUNT OF AT LEAST CAPITAL GAIN WITHIN FROM THE DATE TRANSFER.

SHE CAN SELL THE NEW LAND AFTER 3 YEARS FROM THE DATE OF IT'S ACQUISION SO THAT CAPITAL GAIN ARISING ON SUCH RURAL LAND WILL  BE EXEMPT FROM TAX.

If the land was in agricultural use for 2 years then the best option would be to first purchase an agricultural land from the proceeds and claim exemption u/s 54B. And then sell that agricultural land at whatever price and on wt ever date and the proceeds would be totally exempt u/s 10(1)

I think  the relevant case does not fall under sec-54B. Sec 54B requires that the urban agricultural land must be in use for the last 2 years. and it is not in use as such.

So, the next best option would be to buy a residential house to claim exemption u/s 54F or to invest in REC/NHAI bonds u/s 54EC

the matter of  her son constructing a residential house has no relevance.

 CA MOHIT GUPTA 

BETTER PRACTICE IS TO CLAIM 54B 

BUT FOR THIS U HAVE TO PROOF THAT THE LAND WAS IN USE FOR AT LEAST 2YEARS N FROM THE SALES AMOUNT PURCHASE RURAL AGRICULTURAL LAND N SELL EVEN THE NEXT DAY.

NO CAPITAL GAIN ARISES AS RURAL AGRICULTURAL LAND IS EXEMPT U/S 10(1)

IF U HAVE NO PROFF THEN GO FOR SEC. 54