Question

1 point
Exemption under Sec 54B is
available for capital gains when
the net consideration on
transfer of --
---- is invested in---
O
a) Agricultural Land in Urban Area;
Agricultural Land
O
b) Agricultural Land in Urban Area;
Agricultural Land in Rural Area
O
c) Agricultural land Rural Area;
Agricultural land
O
d) Agricultural land in Rural Area;
Agricultural Land in Rural area​

Answer 1

Answer:

Agricultural land in Rural Area in India is not considered a capital asset. Therefore any gains from its sale are not taxable under the head Capital Gains. For details on what defines an agricultural land in a rural area, see details of capital assets here.

Do you hold agricultural land as stock-in-trade? If you are into buying and selling land regularly or in the course of your business, in such a case, any gains from its sale are taxable under the head Business & Profession.

Under Section 10(37) of the Income Tax Act, Capital Gains on compensation received on compulsory acquisition of urban agricultural land is exempt from tax.

Explanation: