Assessee
This section is applicable to Individual or HUF
Nature of Capital Asset
Exemption is allowable for only on Long Term Capital Asset or Shorty Term Capital Asset
Transfer of Asset
Exemption is applicable for transfer of urban agriculture land which is used by Individual or his parents for agriculture purpose during 2 years before the transfer
New Asset to be Purchased or Constructed
- New asset Acquired Agriculture land either urban or rural .
- Purchase: Purchase the agriculture land within 2 years after the date of transfer
Amount of Exemption
Amount of exemption is available in following manner
1. Capital gain Amount (or)
2. Cost of new asset/ Deposit amount in capital gain scheme
which is lower
Transfer of New Asset
New asset transferred within 3 years from date of purchase or construction, then cost of acqusition of new asset reduced by exempted capital gain
Capital Gains Account Scheme
If the assessee is unable to purchase or construct property before the due date of furnishing of return of income for the year of transfer and still wants to save tax he or she can invest / deposit all the unutilized capital gain proceeds of the old house property in Capital Gains Deposit Scheme. In this way the new property can be purchased later and the capital gains from the proceeds of sale of old house property will not be taxable too.
Various conditions are specified for deposition in the Capital Gains Account Scheme in the Income Tax Act. They are:
- This can be done in authorised/approved bank branches. Rural branches of banks are not included.
- The deposition has to be done before the due date for filing income tax returns.
- The deposited amount has to be utilized to purchase/construct the house as per the provisions of the law.
Capital Gain on Sale of Urban Agriculture Land
| Particulars | Amount |
| Full Value Of Sale Consideration | xxxx |
| Less: Expenses on transfer | (xxx) |
| Net Consideration | xxxx |
| Less: Cost of Acquisition/ICOA | (xxx) |
| Less: Cost Of Improvement/ICOI | (xxx) |
| Capital gain/Loss | xxx |
Rural Agricultural land
(A). If situated in any area which is comprised within the jurisdiction of a municipality and its population is less than 10,000, or
(B). If situated outside the limits of municipality, then situated at a distance measured-
>>> More than 2 kms, from local limits of municipality and which has a population of more than 10,000 but not exceeding 1,00,00
>>> More than 6 kms, from local limits of municipality and which has a population of more than 1,00,000 but not exceeding 10,00,000
>>> More than 8 kms, from local limits of municipality and which has a population of more than 10,00,000.
Urban Agricultural land:
Urban agricultural is a land located in specified location and used for agricultural purposes.
Now what is specified location in regards to urban agricultural land-
A.) If situated in any area which is comprised within the jurisdiction of a municipality and its population is up to 10,000, or
B.)If situated outside the limits of municipality, then situated at a distance measured-
>>> Up to 2 kms, from local limits of municipality and which has a population of more than 10,000 but not exceeding 1,00,000
>>> Up to 6 kms, from local limits of municipality and which has a population of more than 1,00,000 but not exceeding 10,00,000
>>> Up to 8 kms, from local limits of municipality and which has a population of more than 10,00,000.
| Shortest distance from jurisdiction of a municipality | Population | Type of Agriculture Land | Shortest distance from jurisdiction of a municipality | Population | Type of Agriculture Land |
| Within the municipality | Less than 10,000 | Rural land | Within the municipality | Less than 10,000 | Urban land |
| More than 2 Kms | >10,000 upto 1,00,000 | Rural land | upto 2 Kms | >10,000 upto 1,00,000 | Urban land |
| More than 6 Kms | >1,00,000 upto 10,00,000 | Rural land | upto 6 Kms | >1,00,000 upto 10,00,000 | Urban land |
| More than 8 Kms | >10,00,000 | Rural land | upto 8 Kms | >10,00,000 | Urban land |
