Is capital gains tax payable on sale of agriculture land?

Question

Please clarify in details about applicability of capital gains tax on the sale proceeds of an agriculture land like it's payable on the sale of other property like a house or a commercial building.Requested response from qualified boarders only.Thanks.

The question pertains to income tax laws of India only.thanks.

Answer 1

Agricultural land is also taxable under the head Income from Capital Gains. But not all the lands. If the land are within 8 kms from the limits of a Municipality/Corporation or a Grama Panchayat which is having more than 10,000 population, then the Ag.land attracts Capital gains. If the lands are more than 8 kms away, then no problem and any amount of gain on it is fully exempt from tax.

2 years back my sun-in-law's HUF sold Ag.lands which were just 6km away from a municipality and paid capital Gains.

http://www.onlinebangalore.com/fina/tax/taxplaning9.html

http://www.taxworry.com/2007/01/agriculture-land-sale-is-taxable.html

http://www.thehindubusinessline.com/iw/2006/01/08/stories/2006010800891300.htm

http://www.livemint.com/Articles/2007/02/06002922/Revenue-from-farmhouse-sale-in.html

http://www.capitalmarket.com/CMEdit/story11-37.asp?SNo=112950

Answer 2

Capital gains tax is not applicable to agricultural land situated in
India.
the condition to be fulfilled is that it should have been in use for agricultural purposes for three consecutive previous years preceding the year in which the transfer takes place

Answer 3

Capital gain on rural land is not taxable.however agricultural land in urban area is taxable.
condition for that according to sec 54B under head of capital gain of income tax act,1961
1.land has been transfer by the individual not by HUF
2.Transfer of agricultural land can be after or before three 3years of acquisition but land must be used by the possessor or parents at least for two years before transfer takes place.
3.assessee must purchase the another agricultural land (rural or urban) within a period of 2years after the date of transfer of the original agricultural land to be used forr Africalateral purpose.
4.in case fo compulsorily acquisition of urban agricu;ltural land is exempt as per condition of sec10(37).
5.quantum amount allowed for deduction
(a) if the amount of capital gain is equal to or less than the cost of new agricultural land,he entire capital gain is exempt.
(b)if the amount of capital gain is greater than the cost of the new agricultural land,the cot of new agricultural land is allowed for exemption.