Capital Gains on agricultural land

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V S A PRASAD (Querist)
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03 March 2008 Mr. X has purchased 3.00 Acres of agricultural land for Rs. 3.00 lakhs in May,2004. The said land is within panchayat limits and more than 8 Kms from a town/city. He has sold the said agricultural land for Rs. 18.00 lakhs in December, 2005. Is there any liability for capital gains tax?

PRASAD

Peter,A.Matthai

Peter,A.Matthai (Expert)
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03 March 2008 sir,
from the details I understand that the agri land is outside notified area - So if Mr X can prove that he was using the said land for agri purposes at the time of transfer , he need not worry about any liability towards capital gains. This is because as per definition , agri land is not a capital asset.

CA Saurabh Maheshwari

CA Saurabh Maheshwari (Expert)
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03 March 2008 LAND IS NOT AN AGRICULTURE LAND IF IT IS SITUATED WITHIN 8 KMS FROM THE LIMITS OF MUNICIPALITY OR CANTOMENT BOARD OR HAVE A POPULATION OF MORE THAN 10000.PANCHAYAT LIMIT ARE NOT CONSIDERED FOR CAPITAL GAIN PURPOSE.AND BEING AGRICULTURE LAND SUCH LAND IS NOT A CAPITAL ASSET AND ANY TRANSFER OF SUCH LAND DOES NOT ATTRACT CAPITAL GAIN

V S A PRASAD

V S A PRASAD (Querist)
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04 March 2008 Is there any Tribunal or court decision for the above matter?

CA Saurabh Maheshwari

CA Saurabh Maheshwari (Expert)
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04 March 2008 THE DEFINATION OF CAPITAL ASSET ITSELF CLEARS THIS POINT

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