1) This exemption is only for compulsory acquisition of

      Urban agricultural land


      Individual / HUF .


 Following condition must be satisfied

(1) Used for Agricultutal Purpose for 2 years

  • The land must have been used for agricultural purposes for atleast last 2 years by Individual or his parents.
  • In Case of HUF,it should be used for atleast 2 years by Members of HUF

Land Owned by

Land Used by


Individual or his parents 


Members of HUF 


(2)The compensation or enhance compensation must be received on or after 1/4/2004



1.This exemption is only for Urban agricultural land


Rural agricultures land  is anyways not taxable as it is not Capital asset .


2. In Case,  Compulsory acquisition done before 1/4/2004


Compensation received after 1/4/2004 Whole Amount Exempt
Some part of compensation received before 1/4/2004 and some later Whole Amount Taxable
Original Compensation recevied before 1/4/2004 but Enhanced Compensation Received on or after 1/4/2004 Original Compensation Exempt,     Enhanced Compensation Taxable
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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.