18 May 2016
I purchased about 5 acres of agriculture land in a village in the year 2008 at a very cheap rates.Some builders have reached there and ready to purchase that land for 120 lacs which I purchased only for 10lacs. Will there be some capital gain issue ,if yes kindly advice me how to handle it.The area is totally rural.I do not have any problem even if I have to pay capital gain.
18 May 2016
It should be a capital asset to come in ambit of capital gain. Considering your query which says it is a agriculture land in a rural area you have to check whether it comes in jurisdiction of municipality or not.It depends where you live.Go through below mentioned criteria:-
Agricultural land situated in a rural area. Rural area means any area which is outside the jurisdiction of a municipality or a cantonment board (known by any name), which has a population of 10,000 or more and is not situated in any area within the distance measured aerially as given below :
Within 2 kilometers from the local limits of any municipality/cantonment board, which has a population of more than 10,000, but not exceeding 1,00,000. Within 6 kilometers from the local limits of any municipality/cantonment board, which has a population of more than 1,00,000, but not exceeding 10,00,000. Within 8 kilometers from the local limits of any municipality/cantonment board, which has a population of more than 10,00,000. Population is to be considered according to the figures of last preceding census of which relevant figures have been published before the first day of the year
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