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CS Executive · Tax Laws and Practice · Capital Gains

Under the Income-tax Act, 2025, capital gains on transfer of agricultural land are not charged to tax where the new agricultural land is purchased within a stated period after the transfer. Which assessee and period fit this relief?

The relief applies to an individual or HUF, who must purchase other agricultural land within two years after the date of transfer of the original agricultural land. Companies, firms and LLPs are not eligible, and the six-month period belongs to a different relief.

  1. AAny company, within one year after the transfer
  2. BAn individual or HUF, within two years after the transferCorrect
  3. CAn individual only, within six months after the transfer
  4. DA firm or LLP, within three years after the transfer

Explanation

Section 83 applies only to an individual or HUF. The new agricultural land must be purchased within two years after the date of transfer. Companies, firms and LLPs are outside its scope, and six months is the period for the NRI foreign exchange asset relief.

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