Gain from income from sale of agri land in rural area

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adv dileep (Querist)
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11 July 2016 sir
as chakrapani sir said and in seen from the all ITR's there is no seperate space for include this income

it means that there is no need to disclose that income??? OK that income not conceded in the ITR and used for purchase of land more the 30Lakhs using such amount or deposited in FD ( capital gain / other)

when file taken for scrutiny..... then how we can guard us for not disclosing that amount????

or is it better that show as income from LTCG and show as full exempt in any col. of itr ......is it advisable????

Shubham Gupta

Shubham Gupta (Expert)
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11 July 2016 it will be shown in income tax , as gain will be calculated then either applying section 54B or 54, deduction by way of investment in land will shown

adv dileep

adv dileep (Querist)
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11 July 2016 not fully invested in land or capital gain fd's my question is that how can i show the gain and get the exemption u/s 10(37)

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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25 July 2024 To claim exemption under Section 10(37) of the Income Tax Act, 1961 for capital gains arising from the sale of agricultural land, you need to fulfill certain conditions and follow specific procedures. Here’s how you can show the gain and get the exemption:

### Conditions for Exemption under Section 10(37):

1. **Type of Asset:** The capital gains must arise from the transfer of agricultural land situated in India. Agricultural land here refers to land which is used for agricultural purposes by the assessee or their parent(s) for at least two years immediately preceding the date of transfer.

2. **Extent of Exemption:** The entire amount of capital gains arising from the transfer of agricultural land is exempt from tax under Section 10(37), provided all conditions are met.

### Procedure to Claim Exemption:

1. **Calculate Capital Gains:**
- Determine the capital gains from the transfer of agricultural land. Capital gains are calculated as:
```
Sale Consideration - (Indexed Cost of Acquisition + Indexed Cost of Improvement)
```
- **Sale Consideration:** Actual amount received or accruing from the transfer of land.
- **Indexed Cost of Acquisition:** Cost of acquisition adjusted for inflation using Cost Inflation Index (CII) notified by the Income Tax Department.
- **Indexed Cost of Improvement:** Cost of any improvements made to the land adjusted for inflation using CII.

2. **Report Capital Gains:**
- Report the capital gains in your Income Tax Return (ITR) under the head 'Capital Gains'.

3. **Claim Exemption in ITR:**
- While filing your ITR, under the 'Exemptions' section, claim exemption under Section 10(37) for the amount of capital gains arising from the transfer of agricultural land.

4. **Documentation:**
- Maintain documentation related to the transaction, including sale deed, proof of ownership of agricultural land, calculation of capital gains, and any other relevant documents.

5. **Verification:**
- The assessing officer may verify the claim for exemption under Section 10(37) during assessment. Ensure all documents and proofs are available for verification if required.

### Important Points to Note:

- Ensure the land qualifies as agricultural land as per the definition under the Income Tax Act.
- The exemption under Section 10(37) applies only to agricultural land situated in India.
- If the agricultural land is compulsorily acquired under any law, certain additional conditions may apply.

By following these steps and fulfilling the conditions laid out under Section 10(37), you can properly show the gain arising from the transfer of agricultural land and claim the exemption from tax under the Income Tax Act. If you have specific details or complex scenarios, consulting a tax advisor or chartered accountant would be advisable for personalized guidance.