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Sale of sand of agriculture land

megha Aggarwal (157 Points)

30 April 2024

If the sand of agriculture land is sale out, will it be taxable? if yes under which section?

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5 Replies

sabyasachi mukherjee (26286 Points)
Replied 30 April 2024

Pls explain

MPR Sanjay Kumar (3007 Points)
Replied 30 April 2024

The exemption u/s 54B is available regarding capital gains arising from the transfer of agricultural land. This exemption is available when capital gain arises from the sale of urban agricultural land. The exemption under section 54B is available only to individuals and HUF

Nikhil Kaushik (Fellow CA) (85417 Points)
Replied 30 April 2024

this is not sale of agricultural land as incorrectly suggested above. The sale of soil will be taxable as either business income or income from other sources depending on the facts of the case.

You can refer:

Income Tax Appellate Tribunal - Chandigarh

Sh, Amarjeet Singh, Ambala vs Assessee on 17 September, 2014

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MPR Sanjay Kumar (3007 Points)
Replied 30 April 2024

Dear megha Aggarwal ,

As per the current Income Tax rules in India, the sale of sand on agricultural land is considered as a non-taxable transaction. This is because agricultural income is exempt from income tax under the Income Tax Act.

However, if the sale of sand is considered as a business activity carried out on agricultural land and not as a part of agricultural operations, it may be subject to tax. In such cases, the income generated from the sale of sand would be taxable under the head 'Income from business or profession'.