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Income-tax Act, 2025 | Section 83

Section 83 - Capital gains on transfer of land used for agricultural purposes not to be charged in certain cases

Capital gain on qualifying agricultural land can be deferred through purchase of replacement agricultural land, subject to user, timing and lock-in conditions.

Reviewed by CA Nikhil Gupta · Updated 9 October 2026

Section 83: operativeEffective 1 April 2026Tax Year 2026-27 onwardReviewed 8 October 2026
Current-law control

Section 83 is presented using the consolidated Income-tax Act, 2025 as amended by the Finance Act, 2026. The general commencement date is 1 April 2026. Earlier years and saved proceedings may remain governed by the Income-tax Act, 1961 and the repeal/savings framework.

2-minute professional decode

Capital gain on qualifying agricultural land can be deferred through purchase of replacement agricultural land, subject to user, timing and lock-in conditions.

Professional checkpoint: Apply the provision only after checking the defined person, tax year, evidence, thresholds and any connected Rule or Schedule.

Who should test this section?

Section 83 matters to investors, property owners, promoters, companies, firms and advisers where the transaction involves capital gains on transfer of land used for agricultural purposes not to be charged in certain cases; the charge, computation and relief steps should be separated.

Evidence to retain

The section 83 file should preserve acquisition and transfer instruments, valuation or stamp records, payment evidence, holding-period material and every document that supports the treatment of capital gains on transfer of land used for agricultural purposes not to be charged in certain cases.

1961 Act bridge

Legacy provisionLegacy headingMapping
54BCapital gains ontransferoflandusedforagriculturalpurposesnottobechargedincertain casesRenumbered / mapped

The bridge is a research aid. Legacy case law carries over only after the current wording and transition rules are matched.

Rules and forms linked to this section

No provision-specific Rule was independently mapped from the current Rules register for this section. That does not mean the wider Rules are irrelevant.

Worked application

An individual sells agricultural land used for farming in the preceding two years and buys new agricultural land within two years. Compute the exemption by comparing gain with new-land cost and track the three-year consequences on early disposal.

Common mistake

For section 83, do not jump from sale proceeds to a capital-gain number: first identify the transfer/charging event, then consideration, cost, timing and any exemption or rollover condition relevant to capital gains on transfer of land used for agricultural purposes not to be charged in certain cases.

Compliance approach

Identify the statutory trigger for section 83, lock the relevant tax year, reconcile the facts to the operative sub-section, preserve the evidence trail and separately test every linked Rule, Form, Schedule and exception before finalising the return position.

Numeric / timing checkpoints in the operative text

Related provisions

Current statutory text

83. (1) Where an assessee, being an individual or a Hindu undivided family,— (a) has capital gains arising from the transfer of a capital asset, being land, which was used by the assessee or his parent, or the Hindu undivided family for agricultural purposes (original asset), in two years immediately preceding the date of transfer; and (b) has, within two years after that date, purchased any other land for being used for agricultural purposes (new asset), then, instead of the capital gains being charged to income-tax as income of the tax year in which the transfer took place, it shall be dealt with as follows:— (i) if the capital gains exceed the cost of the new asset, such excess shall be charged under section 67, and for computing any capital gains arising from the transfer of the new asset within three years of its purchase, the cost shall be nil; or (ii) if the capital gains is equal to or less than the cost of the new asset, no capital gains shall be charged under section 67, and for computing any capital gains arising from the transfer of the new asset within three years of its purchase, the cost shall be reduced by the amount of the capital gains. (2) If the capital gains referred to in sub-section (1) is not utilised by the assessee to purchase the new asset before filing the return of income under section 263, then— (a) the unutilised amount shall be deposited in a specified bank or institution and utilised as per the scheme notified by the Central Government; (b) such deposit shall be made before the filing of the return and not later than the due date applicable in the case of the assessee for filing the return of income under section 263(1); and (c) the proof of deposit shall be submitted along with such return. (3) For the purposes of sub-section (1), the amount already utilised for purchasing the new asset together with the deposited amount under sub-section (2), shall be deemed to be the cost of the new asset. (4) If the amount deposited under sub-section (2) is not fully utilised for purchase of the new asset within the period specified in sub-section (1), then,— (a) the unutilised amount shall be charged under section 67 as the income of the tax year in which two years from the date of the transfer of the original asset expires; and (b) the assessee shall be entitled to withdraw such unutilised amount in accordance with the scheme referred to in sub-section (2).

Primary-source trail

Source status: full Section 83 statutory text in the local source corpus; reconciled to the current consolidated Act control on 8 October 2026.

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Chapter guide: Chapter IVIncome-tax Act, 2025 section indexIncome-tax Act, 2025 study guide hubIncome-tax Rules, 2026 repositoryIncome-tax Forms, 2026 repository