Section 10(37) → Section 12
Capital Gains on compulsory acquisition of urban agricultural land
Quick Answer
Section 10(37) of the Income Tax Act, 1961 (Capital Gains on compulsory acquisition of urban agricultural land) corresponds to Section 12 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 10(37)
Under the Income Tax Act, 1961, Section 10(37) governs capital gains on compulsory acquisition of urban agricultural land. Exempts capital gains arising to an individual/HUF from the compulsory acquisition of urban agricultural land by the government.
From 1st April 2026, the same subject sits at Section 12 of the Income-tax Act, 2025 — retained and renumbered as Section 12 of the Income-tax Act, 2025. Retained. Protects farmers whose land falls within expanding municipal limits from heavy capital gains tax upon government acquisition.
For Section 10(37), the practical impact is rated High. Major relief during highway and urban infrastructure expansions.
Sec 10(37)
Provision Summary
Exempts capital gains arising to an individual/HUF from the compulsory acquisition of urban agricultural land by the government.
Sec 12
Provision Summary
Retained. Protects farmers whose land falls within expanding municipal limits from heavy capital gains tax upon government acquisition.
Key Changes & Highlights
- Aligned with compensation limits under the new Land Acquisition Act.
Frequently Asked Questions
What is Section 10(37) of the Income Tax Act, 1961 about?
Section 10(37) of the Income Tax Act, 1961 covers capital gains on compulsory acquisition of urban agricultural land. Exempts capital gains arising to an individual/HUF from the compulsory acquisition of urban agricultural land by the government.
Which section replaces Section 10(37) in the Income-tax Act, 2025?
Section 10(37) of the Income Tax Act, 1961 maps to Section 12 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. Protects farmers whose land falls within expanding municipal limits from heavy capital gains tax upon government acquisition.
What is the impact of the change to Section 10(37) under the new tax code?
The transition impact for Section 10(37) is rated High. Major relief during highway and urban infrastructure expansions.
What should I watch out for when Section 10(37) moves to the 2025 code?
Aligned with compensation limits under the new Land Acquisition Act. These points are specific to Section 10(37) (Capital Gains on compulsory acquisition of urban agricultural land).
Disclaimer: This mapping of Section 10(37) (Capital Gains on compulsory acquisition of urban agricultural land) to Section 12 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 10(37) is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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