Capital gain

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lalit (Querist)
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16 June 2013 want to sell rural agricultural land in a village having population of 6000 persons held before 1981
Is there any capital gain tax implications?

CA Alexandar Gazi

CA Alexandar Gazi (Expert)
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16 June 2013 Lalit,

According to sec. 2(14)
Rural agricultural land is not a capital assets provided such land is not situated within eight kilometers of the local limit of a municipality or cantonment board which has a population of 10,000 or more according to the last preceding census.

W.e.f. 1/4/2014

1) Instead of 8 kilometers it would be 2 kilometers provided population in municipality or cantonment board area exceeding 10000 but not more than 100000 according to the last preceding census.
2)Instead of 8 kilometers it would be 6 kilometers provided population in municipality or cantonment board area exceeding 1 lakh but not exceeding 10 lakh according to the last preceding census.
3) It would be 8 kilometers provided population in municipality and cantonment board area exceeding 10 lakh according to the last preceding census.

Considering the above explanations you can easily decide whether the agricultural land is falling within the ambit of the definition of capital assets.

If an assets is not defined as capital assets, there is no capital gain tax at all.

Alexandar Gazi

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