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CAPITAL GAINS ON SALE OF LAND (a general article by Mr.Kunjan Shah on 6-july-2011 for benefit of any visitor on our site)



 land  in India in financial year 2010-2011



  Not applicable as transfer is not of residential property.


Not applicable as transfer is land is not  agricultural on date of transfer


Not applicable as there is no compulsory acquisition by authorities.


Not applicable as investment in bonds as 6 months has elapsed from date of transfer.


Long Term Capital Gain from the Transfer of a Capital Asset other than Residential House Property

·        The exemption is available as seller is individual


·        The capital asset (i.e. land) results in a long-term capital gain (long term capital gain broadly means it is held at least for 3 years by seller or her relative from whom she might have inherited)


·        The amount of gain is invested in acquiring a new residential house.


·        The transferor assessee should purchase a residential house in India within a period of one year before or two years from the date of transfer or construct a residential house within three years from the date of the transfer of the original house. (Construction must be completed within these 3 years.), and

·        The new house property purchased or constructed has not been transferred within a period of three years from the date of purchase or construction. 





Not applicable as assessee is not shifting an industrial undertaking to non-urban area


Not applicable as assessee is not shifting an industrial undertaking to any Special economic zone.

Disclaimer :-

A)     A) We have assumed that the land is :-

1.      is non-agricultural and

2.      Even if it is agricultural land, it is situated in these 3 zones in India

(a)   in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or

(b)   a cantonment board and which has a population of not less than ten thousand according to the last preceding census of which the relevant figures have been published before the first day of the previous year; or

(c)   in any area within such distance, not being more than eight kilometres, from the local limits of any municipality or cantonment board

B)     Money has been received by seller ; Please Note that seller can ether purchase another house or seller has to deposit in a bank a/c. scheme called capital gain scheme before due date of seller's income tax return  for Assessment year 2011-2012, (which could be 31.july.2011 or 30.sept.2011)

C)    We are assuming seller  has sold in period from 1.4.2010 to 31.3.2011.

To summarise, prima facie, if you satisfy with conditions stated above u/s. 54 F, you can claim the exemption.

Above article is by Mr.kunjan shah, , Mumbai , written on 6-july-2011.



posted 6 Feb 2013, 21:33 by CA Kunjan ‎(practising CA)‎ BKC,Mumbai

Below is a short write up for general use of all 
If you sell shares of a after holding those shares for more than 3 years, you can claim exemption from long term capital gain tax only if :-
1.  Investment is made in bonds in 6 month's time u/s. sections 54EC and/or
2. Investment is made in a new house u/s.  54F

from CA Kunjan Shah , 

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