Capital gain

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PARDEEP KAPIL (Querist)
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18 November 2011 An individual was given a piece of land in ÜRBAN AREA of delhi by his late father in year 1954. Now he is selling the same for Rs.17,00,000 and proceeds of which will be distributed among his four brothers. My query is (1) What is defination of urban land as per Income Tax Act (2) What is defination of agriculture land as per Income Tax Act (3)What will be Income Tax liability on sale of land. Regards

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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18 November 2011 In brief -

-the area of Municipal Corporation and
-the area notified to be urban area in its surrounding (max. upto 8 kms from the municipal limit) is called Urban Area.
Land situated in this area is urban land.
2. As per Income tax a land on which you or any of your parent have carried on agriculture activities in the past two years from today... is an Agri. Land.
3.
In your case capital gains will arise as the land is Urban Land. However, in case of Agri. Urban Land, you can invest capital Gains in other Agri. Land (section 54B) and in Residential House (Section 54F), where as in case of non agriculture land if you invest in Residential House, exemption may be availed.

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