Capital gain

This query is : Resolved

KIRAN KOTAK (Querist)
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09 February 2014 Suppose A is selling the Agricultural land to B. B has the Approval of Authority to Develop the said land for Non Agricultural Purposes.The said approval was given to B prior to Execution of Sale Deed Between A & B. Will Because of Approval Given to B, the same Land will be Treated as Non Agricultural land in the hand of A. The said Agricultural is Beyond the Limits of Municipality.

CA Galib Mirza

CA Galib Mirza (Expert)
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09 February 2014 Dear Kiranji
in my view
In this case B has received the rights to use Agri Land for NA purpose prior to purchase of land.
If he is not the owner how he can receive rights prior to that w.r.t land which is not owned by him.
hence it appears that the land was already NA and liable for CG

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

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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09 February 2014 It is not material that the purchaser has some order for use of the agricultural land. You are selling the agricultural land and not the NA land so all provisions applicable to agricultural land shall be applicable.

Now, if the agricultural land is outside the municipal are then the capital gain is exempted otherwise either you have to reinvest in agricultural land or pay the capital gain tax.

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