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CS Executive · Tax Laws and Practice · Capital Gains

Under section 83 of the Income-tax Act, 2025, an individual does not utilise the capital gain on agricultural land to buy new land before filing the return. What must the assessee do to keep the benefit?

The assessee must deposit the unutilised gain in a specified bank or institution before filing the return, and not later than the return due date, and attach proof of the deposit to the return. Later deposits or share investments do not meet the requirement.

  1. ADeposit the unutilised amount in a specified bank or institution before filing the return, within the due date for the return, and submit proof of deposit with the returnCorrect
  2. BWait for two years and then pay the tax on the entire gain without any deposit
  3. CDeposit the unutilised amount within one year after filing the return
  4. DInvest the amount in shares of a listed company within six months

Explanation

Section 83(2) requires the unutilised gain to be deposited in a specified bank or institution before the return is filed and not later than the due date for filing under section 263(1), with proof submitted along with the return. A later deposit or a share investment does not satisfy this. Unused deposit is charged when two years from the transfer expire.

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