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Capital gain

S. Jamali (Director Roshan Akauntax Limited) (70 Points)

19 November 2012

AN ASSESSEE SOLD AGRICULTURE LAND with in 8 km of local limit of municipality so as per sec 2(14) not exempt AND PURCHASED AGRICULTURE LAND ON HIS SON’S NAME DUE TO UNAVOIDABLE FAMILY MATTER

CAN HE CLAIM EXEMPTION U/S 54B

HE CAN NOT CHANGE THE PURCHASE REGISTRY AGREEMENT DUE TO FAMILY MATTER

IS THERE ANY OTHER WAY TO SAVE CAPITAL GAIN ON ABOVE CASE

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3 Replies

saurabh goyal (self employed) (103 Points)
Replied 19 November 2012

The capital gain tax is not levied on transfer of agriculture land which is not situated inside / within periphery of 8 km of municipality limits of notified areas / cities with population of 10000.

Under the provisions contained in the Income-tax Act 1961, capital gains tax is payable whenever profit is derived on selling a capital asset. However, agricultural land in India under certain facts and circumstances is not treated as capital asset as per the definition contained in section 2(14) of the Income-tax Act 1961.

The simple theme is if an item which is sold is not considered as a capital asset. In that situation any gain arising there from will not be subjected to income-tax.

So in your case no question of capital gains & you can utilize that money in any way

Just get ask your Tehsildar to issue a certificate that your lands falls under agriculture land area and you won't face any problem in future.