28 February 2011
As per section 54 B of Income tax act, 1961 When Urban agricultural land is held by an individual or his parents for 2 or more years just before transfer of capital asset, then capital gain arising from transfer of such land is exempt from income tax if invested within agricultural land before end of two years from date of transfer.
My question is that if An individual is not the owner of such land and is using such land for agricultural purpose and acquires such land from it's actual owner after 2 years and sells it immediately, then whether the exemption will prevail or not ? reply immediately
28 February 2011
Amar, In my view, in Section 54B, ownership is not mandated. Only ....the use of the land.... by the assessee or any of his parents.... for agriculture purpose has been.... mentioned. So the only thing remains to be justified is that the land has been used by the asseseee for a period on 2 years immediately preceding the date of transfer and if it can be justified, I am of the opinion that exemption U/s 54B can be availed.
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