Urban Agricultural Land and Long-Term Capital Gain Exemption
21
Particulars
54B
Remarks
Applicability
1.Individual 2.His/Her Parents 3.HUF
Asset under Sale
Urban Agricultural Land
Rural agricultural land does not qualify to be a capital asset. Hence no capital gains/losses arise on the sale or transfer of rural agricultural land.
Reinvestment in
Agricultural Land
Condition
The asset sold must have been used for the agricultural activities for immediately 2 years before transfer.
The holding period for assets to be categorized as long-term is 24 Months i.e. 2 years.
Period for Reinvestment
2 Years After the date of Transfer
10(37): Exempts Capital Gains on the compulsory land acquisition under any law, effective on or after 01-04-2004.
Deposit in Capital Gain A/c Scheme (CGAS)
If the amount is not utilized Till the due date U/s 139(1) of filing ITR For a Maximum Period of 2 years
Time limit for deposit in CGAS
Latest by the due date of filing the ITR U/s 139(1)
Unutilized Amount in CGAS
If not utilized within 2 years of deposit, it shall be treated as income of PY in which such time lapses.
Amount of Capital Gain (CG) Exemption
Lower of: 1.Capital Gain arising on transfer of agricultural land. or 2.Investment in new agricultural land.
Tax Rates:Long term: Before 23-07-2024: 20% + Indexation Benefit On or After 23-07-2024: 12.5% , NO Indexation Benefit Short Term: As per Slab Rates
Cost of new Asset for exemption
Amount Spent + Deposit in CGAS
Lock in Period
3 Years
Rural Agricultural Land:
Sold during Lock in
The cost of the Acquisition of the new Asset shall be treated as: 1.NIL or 2.Reduced by CG value As the case may be.
Period of expiry to be counted from
The date of Transfer of the original asset
Definitions
Urban Agricultural Land: Any agricultural land that does not fulfill the criteria of Rural agricultural land
Area Type
Population Criteria
Within Municipality
Less Than 10,000
Within the specified distance from a municipality or cantonment board:
> 2 Km to 6 Km
=>10,000 to 1,00,000
>6 Km to 8 Km
>1,00,000 to 10,00,000
>8 Km
>10,00,000
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