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Agriculture income

08 March 2017

One of my friend received consideration on transfer of agriculture land worth 20 lacs. The land is acquired under complusory acquisition by Railways. Is this transaction liable to tax or is exempted. If it is exempted where should we disclose the same. Please share your thoughts.

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5 Replies

Nitish Agrawal (CA) (810 Points)
Replied 08 March 2017

Firstly you need to see whether the agricultural land which has been acquired by govt is rural or urban one. If it is covered under urban area then it is a capital asset which is the basic requirement for being taxable. But if the land is rural agricultural land then such transfer is exempted for any tax.

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krishna kotturi (8 Points)
Replied 08 March 2017

thank u nitish.. it is in Rural area, but should i file the ITR if yes where to disclose such income in ITR??

Suresh Pai S (Tax Consultant) (1029 Points)
Replied 08 March 2017

You need to file return only if the gross total income exceeds the basic exemption limit. The above income doesn't need to be included to find out GTI because it is exempted from income itself.