Taxability of compulsory acquisition of urban land

This query is : Resolved

AMIT RATHI (Querist)
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02 December 2015 URBAN AGRICULTURE PLOT SITUATED IN MUNICIPAL AREA WAS ACQUIRED UNDER LAND ACQUISITION ACT BY THE GOVT. OF INDIA WHETHER AMOUNT RECEIVED AS COMPENSATION WILL BE TAXABLE OR NOT. PLEASE REPLY WITH SUPPORTED SECTION.

Prakash Mundada

Prakash Mundada (Expert)
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02 December 2015 There will be no Capital Gains on Transfer of Rural Agriculture Land but if Urban Agriculture Land is transferred then it is to be proved that it is used for Agriculture(maximum 8 kilometres limit) purpose by him or his parents for a period of immediately preceeding 2 years.

If it is not used for Agriculture then it will be taxable but exemption under section 54 can be claimed if such respective investments are made(54EC, 54B and 54F)