Agricultural land sale

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rajeev (Querist)
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15 August 2013 My grandfather agricultural land is acquired by State Government.
My first question whether income on sale of agricultural land is taxable or not?
My second question my grandfather fix this amount to F.D., whether interest on F.D. is taxable or not?

Ganeshbabu K

Ganeshbabu K (Expert)
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16 August 2013 interest on FD is taxable..

1)sale of agriculture land which is situated in rural area is not capital asset so transfer of rural agricultural land will not amounts to capital gains tax as per Sec.2(14)

2)refer Notification 9447

3)Rural agriculture land means an agriculture land in India:

(i)It situated in any area which is comprised within the jurisdiction of a municipality ( whether known as a municipality, municipal corporation, notified area committee, town committee or by any other name) and its population should be less than 10,000 as per the last published census, or

(ii)If situated outside the limit of municipality, etc., it should be situated certain kilometers away from the local limits of any municipality, etc. as may be specified by the Central government in the official Gazette.

(iii)The Central government can notified urban land upto maximum 8Kms from the limits of municipality, etc.Which are the Assets not Taxed under Capital Gain Head of Income Tax Act.

Thanks & regards
Ganesh babu k

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