Capital Gain

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 July 2011 One of my clients have sold a agricultural land in Bhopal( M.P.), received by way of inheritance for Rs. 2400000/- lacs. Will any capital gain arise on it ? Can we show it in ITR ? Pls explian.....

CA. AJIT KUMAR MURARKA

CA. AJIT KUMAR MURARKA (Expert)
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23 July 2011 CAPITAL GAIN ARISING FROM SALE OF ONLY RURAL AGRICULTURAL LAND IS NOT SUBJECT TO TAX. SINCE YOUR INHERITED LAND IS SITUATED IN URBAN AREA, THE SAME IS SUBJECT TO CAPITAL GAIN TAX. COST OF ACQUISITION SHALL BE THE COST TO THE FIRST PREVIOUS OWNER. FOR EXAMPLE IF COST TO THE FIRST PREVIOUS OWNER IS TWO LAKHS THEN THE SAME, AFTER INDEXATION, SHALL BE DEDUCTED FROM SALE CONSIDERATION OF RS. 24,00,000 TO ARRIVE AT CAPITAL GAINS. INDEXATION SHALL BE APPLIED FROM THE FINANCIAL YEAR IN WHICH YOU ACQUIRED THE LAND BY WAY OF INHERITANCE.THERE IS A SCHEDULE FOR SHOWING CAPITAL GAINS IN THE ITR FORMS.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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25 July 2011 I agree with the expert subject to the fact that the agriculture land is also taxable u/s 50B and if against the capital gain another agricultural land is purchased then it is not taxable.