Compulsory acquisition of agricultural land.

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CA Sanjay Baheti (Querist)
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01 February 2011 Government acquired agricultural land under compulsory acquisition scheme. One condition of section 10(37) of holding the agricultural land for a period of 2 years by individual or his parents is not satisfied. Similarly it is also not a capital assets as defined under section 2(14) of the Act for calculation of short termlong term capital gain. Loss on such acquisition will be shown under which head of income. Can it be set off against other head of income?

Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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01 February 2011 If the land is held for more then 36 months then LTCL(Long Term Capital Loss) otherwise STCL(Short Term Capital Loss)

Long Term Capital Loss can only be adjusted with Long Term Capital Gain but
Short Term Capital Loss can be adjusted with Long Term Capital Gain as well as Short Term Capital Gain