28 November 2008
Pls resolve wheather an agricultural land converted into a non-agricultural land (by way of it being included within municipal limits by redrawing city boundries) is liable to capital gains tax (deemed capital gain)...This is mainly required because the said land is converted into plots and offered for sale the profits as required by law will be taxable as income from capital gains.pls bear in mind that the land initially is an agricultural land which is not a capital asset..
28 November 2008
when the plots are sold the capital gain tax will be liable just by converting the agriculture land to non agriculture land the capital gain tax does not arise so the time period for long term or short term will be calculated from the date on which the land is non agriculture
CAclubindia
