Festive Savings Are Here. Get 10% OFF on All CCI Pro Plans. Subscribe Now!

LTCG treatment of sale of urban agricultural land

459 views

Save Share

Join Us Follow Us Add as Source

bkp

self-employed

73 Points Posted on 06 February 2020

Question: Plot of agricultural land (in urban area) is sold.

Can the LTCG from sale of this land be reinvested in a residential property to avail of LTCG exemptions for purposes of tax, or does it necessarily have to be in another agricultural plot. Would be grateful for your guidance.

Replies (3)

Quick Summary

This discussion explores whether the Long-Term Capital Gains (LTCG) tax from selling urban agricultural land can be reinvested into a residential property to claim tax exemptions. While Section 54F generally allows reinvestment in a residential property for LTCG exemption, there's confusion regarding Section 54B, which specifically requires purchasing another agricultural plot for exemption. The query seeks clarification on which section applies and the conditions for claiming the exemption.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121543 Points Posted on 07 February 2020

Yes, exemption u/s. 54F can be availed...

Roshni

Studwnt

730 Points Posted on 07 February 2020

You can invest in residential property.

bkp

self-employed

73 Points Posted on 07 February 2020

Can you please clarify under which provision?? For I am confused by the following regrding sale of agricultural land:

"Conditions you need to meet Under Section 54B for claiming exemption from Capital Gains

The exemption is available to an Individual or a HUF.
The land which is being sold must have been used for agricultural purposes by the individual or his parents or by the HUF for a period of 2 years immediately before the date of transfer.
Another land for the agricultural purpose should be purchased within a period of 2 years from the date of transfer of this land.
The new agricultural land which is purchased to claim capital gains exemption should not be sold within a period of 3 years from the date of its purchase."