When an individual sells a Agriculture Land and buys another One or more agriculture land, he will be eligible for exemption under Section 54.
Conditions U/s 54B :
- The taxpayer (i.e. seller) needs to be an individual or HUF.
- Firms, LLP’s and companies cannot utilize the benefits of this section.
- The Assesee or his parentsor HUF should have been using Agricultural Land so transferred for a period of atleast 2 years at the time of Sale
- Transfer asset should be long term.
- Investment should be made within 2 years from the date of transfer or sale of agriculture land.
If new asset is sold within 3 years, amount earlier exempted under this section will be reduced from its COA (Cost of Assets) to calculate capital gains thereon.
If the amount in CGAS is not utilized within the prescribed time limit, such unutilized amount will be taxable as capital gains.