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CMA Intermediate · Direct and Indirect Taxation · Capital Gains

Under section 83 of the Income-tax Act, 2025, if capital gains from transfer of agricultural land are not utilised to buy new agricultural land before filing the return, the unutilised amount must be deposited in a specified bank or institution. Which statement is correct?

The deposit must be made before the return is filed and not later than the due date for filing it, and proof of deposit must accompany the return. Section 83(2) imposes this condition on unutilised capital gains from agricultural land if no new land is purchased by then.

  1. AThe deposit may be made any time within three years of transfer
  2. BThe deposit is needed only if the return is filed late
  3. CThe deposit must be made before filing the return and not later than the due date for filing it, with proof submitted along with the returnCorrect
  4. DThe deposit is made after the return is filed, within the two-year period

Explanation

Section 83(2)(b) requires deposit before filing the return and not later than the applicable due date under section 263(1), and 83(2)(c) requires proof of deposit with the return. The other options contradict this timing.

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