capital gain

Dear Querist

Section 54 of the Income Tax Act, 1961 provides for exemptions of capital gains in respect of capital gains arising out of sale of capital asset of long-term residential house property. Vacant land doesn’t come under its purview.

Section 54B deals with exemption of capital gain on land, but such land should be an urban agricultural land used for agricultural purposes for at least past 2 years. Further one needs to purchase another agricultural land within two years from sale of previous land and adhere to conditions regarding lock-in period.

As your situation isn’t falling under any of these sections hence no exemptions under the head capital gain can be claimed for such transaction under income tax act. In case such land is rural agricultural land then capital gain would be exempt as it is not considered to be a capital asset under income tax

I hope the point is clear

Thank you!