What are the circumstances in which exemption under section 54B can be withdrawn?
The exemption claimed by assessee under section 54B can be withdrawn in the following circumstances:
a) Transfer of new agricultural land within 3 Years: If a taxpayer purchases new agricultural land to claim exemption under s​ection 54B and subsequently transfers the new agricultural land within a period of 3 years from the date of its acquisition, then the benefit granted under s​ection 54B will be withdrawn.
If the agricultural land is sold within a period of 3 years from the date of its purchase, then at the time of computation of capital gain arising on transfer of the new agricultural land, the amount of capital gain claimed as exemption under s​ection 54B will be deducted from the cost of acquisition of the new agricultural land.
b) Amount deposited in capital gains scheme account is not utilized in prescribed time limit: Where amount deposited in capital gains scheme account is not utilised to purchase an agriculture land within 2 years after the date of transfer, the unutilised deposit is deemed to be long-term capital gain of the relevant previous year in which the time-limit of 2 years expires.