When Mr Patel from Navrangpura, Ahmedabad, sold his 1/3rd share of his family's agricultural land for Rs 7.24 crore, he didn't pay any tax because he claimed the Section 54B tax exemption.
For those unfamiliar, Section 54B of the Income-tax Act, 1961 states that you don't need to pay any income tax on sale of agricultural land that has been used for agricultural purposes by you, or your parents, or the family's HUF for at least two years immediately before the date of sale transfer, and the capital gains from this sale is reinvested in another agricultural land within 2 years from the date of transfer. The tax exemption applies to the amount you invest in the new agricultural land.
