compulsory acquisition of agricultural land

hi our agricultural land has been acquired by government for construction of highhway, can i buy 2 residential flats from the compensation recieved? i already own 1 flat. what are tax implications?
Replies (2)
You should mentioned type of agriculture land.

If it is rural agricultural land then its not considered as capital asset u/s 2(14) so liability of capital gain will not arise.

If it is urban agricultural land and there's compulsory acquisition of such land is exempted u/s 10(37) if value of such land approved by Central govt or reserve bank of india.

As case may be capital gain will arise.

As per sec 54F exemption available IF sold any long term capital asset (other than residential house) and invest such capital gain to acquire 1st or 2nd residential house.

In your case you already have one house so if you wanna buy two house then you can take advantage of only one house which value is higher. And 54F available on proportion basis.

If you invest such capital gain to acquire any agriculture land then you can enjoy benefit of full investment(subject to maximum capital gain) u/s 54B
as stated by Mr. mayur, if it's rural agricultural land, it's exempt from taxation.

if it's urban agricultural land and acquisioned under rfctlarr act then it's exempt.

if it's urban agricultural land and if you satisfy this conditions then it's exempt from taxation

I. during the period of two years immediately preceding the date of transfer, was being used for agricultural purposes by such Hindu undivided family or individual or a parent of his;

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