Chirag a resident individual, aged 62 years sold an urban agricultural land for ₹ 74 lakhs to Anupam on July 15, 2024 when the stamp duty value of agricultural land was ₹ 95 lakhs. However, in the "agreement to sell" the

Computation of Capital Gains of Chirag for A.Y. 2025-26 Particulars Amount (₹) Amount (₹) Capital gain on sale of urban agricultural land Actual sale consideration 74,00,000 Stamp duty value as on date of agreement i.e., on 15.5.2024 [Since part consideration is received through IMPS on the date of agreement] 84,00,000 Full Value of Consideration [Stamp duty value on the date of agreement since it exceeds 110% of the actual sale consideration] 84,00,000 Less: Expenditure in connection with transfer [1% of sale consideration i.e., 74 lakhs] (74,000) Net Sales Consideration 83,26,000 Less: Indexed cost of acquisition [10,85,000 x 363/109] (36,13,349) Long Term Capital Gains 47,12,651 Less: Exemption u/s 54B - In respect of rural agricultural land purchased on 1.1.2025. Mr. Chirag is eligible to claim exemption u/s 54B since he has used the urban agricultural land for agricultural purposes for more than 2 years preceding the date of its transfer. (39,00,000) Long term capital gain 8,12,651 Capital gain on sale of Rural Agricultural land — As per section 54B, if the new agricultural land is transferred within 3 years from the date of its purchase while computing the capital gains on transfer of such new agricultural land, the cost of acquisition of such land would be reduced by the amount of capital gain claimed as exempted. However, since rural agricultural land is not a capital asset, hence, no capital gain would arise on sale of such land even though it is transferred within 3 years from the date of its purchase. Further, no exemption is allowed from Long Term Capital Gains for investing any amount in Fixed Deposit.