Capital gain tax on sale amount of an agricultural land

Hi Pankaj

I have bought 3 acres of agricultural land in 2008 with purchase price as 375000 per acre and sold the land with selling price of 600000 per acre in April 2012. Meanwhile I am going to buy another agricultural land nearby to my city by August 2012 for an amount of 2000000. So do I need to pay the capital gain tax on the sale income of agricultural land ? also please advise can I keep the sale income in a fixed deposit / savings bank at a Nationalised bank until August 2012 ?? If I keep the proceeds under fixed deposit will that amount attract any tax

Please suggest.



asked May 03 '12 at 12:17 by sri_giridhar 111

As you are buying another agricultural land with cost more than capital gains arising from old land sale, you need not to pay income tax on long term gains u/s 54B.

If new land is purchased before 31st July 2013 (last date of income tax return filing for FY in which gain occurred), you can keep amount anywhere in the meantime.

Interest earned from such deposits would be taxable as usual like any other interest income as per your income tax slab rates.

answered May 20 '12 at 11:29 by Pankaj Batra 5.2k320


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Asked: May 03 '12 at 12:17

Seen: 1,454 times

Last updated: May 20 '12 at 11:29