Capital Gains Tax Relief for Agricultural Land: Clause 83 of the Income Tax Bill, 2025 vs. Section 54B of the Income Tax Act, 1961

Capital gains exemption for agricultural land: reinvest sale proceeds in new agricultural land within two years to defer tax.

Capital gains on transfer of agricultural land are not charged if proceeds are reinvested in new agricultural land within two years by individuals or HUFs who used the land for agriculture in the two years prior. Unutilised gains at filing must be deposited in a specified bank account and applied under a government-notified scheme; unused deposits after the prescribed period are taxed and may be withdrawn per the scheme. Excess gains are taxed under the bill's taxing provision and the new asset's cost is treated as nil for subsequent gains if sold within three years; otherwise the cost basis is reduced by the capital gains.