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Capital gain taxation for agri land sale

ujjwal (Proprietor) (42 Points)

31 October 2011

Respected Sir / Madam
MIDC is acquiring urban agriculture land of my client for railway track purpose . They are also deducting TDS @ 10 % u/s 194LA which is for compensation on acquisation of immovable property. He is using the land for agriculture purpose for last 2 years. Is He liable to get deduction U/s10(38) and entitle to get full amount of refund after filling return or Is he need to purchase another agriculture land to avail exemption U/s 54B
Kindly guide on the same

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CA RICHA BADALIA (CA,CS) (1682 Points)
Replied 31 October 2011

Sec 194LA is not applicable for compulsory acquisition of agricultural land.Check with MIDC why they are deducting TDS on it.In your case exemption u/s 10(37) would be applicable.

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(Guest)

Yes you can avail exemption u/s 10(37). It is not section 10(38). You need not buy any other agricultural land to claim exemption u/s 54B. Section 194LA is applicable.

https://taxbykk.blogspot.com/

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VISHAL SINGH (Chartered Accountant) (71 Points)
Replied 01 November 2011

As you said agricultural land is situated in urban area, TDS will be u/s 194LA & the assessee cannot claim exemption u/s 10(37) as urban agricultural land is involved.