Capital gains on sale of agricultural land

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CA Aagam Shah (Querist)
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04 March 2016 My client is an individual. He is owner of agricultural land inherited from his father. Therefore his name appears in 7/12 extract of the said land. Later on he got his spouse and daughter's name added in 7/12 extract. On sale of the said land, the daughter is going to get share in sale proceeds. what is the applicability of capital gains in this scenario ? It will be applicable to the individual only or all three whose names are appearing in 7/12 i.e. individual, spouse and daughter ?

CA CMA CS Ram Pavan Kumar Melam

CA CMA CS Ram Pavan Kumar Melam (Expert)
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05 March 2016 To reply your query the below information is needed:
1. Whether the agricultural land situated in any urban area or provide the distance from nearest municipal limits and population of that municipality;
2. I am not aware of 7/12...I assume it is a part of revenue records....however, please clarify;
3. Is there any settlement / Gift deed transferring to spouse and daughter? Without such a document, how the title passes to his spouse and daughter?

CA Aagam Shah

CA Aagam Shah (Querist)
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05 March 2016 Sir,
The question here is about relevance of names appearing in 7/12 extract only. Whether names appearing in 7/12 are all owners and eligibile to capital gains ?

CA CMA CS Ram Pavan Kumar Melam

CA CMA CS Ram Pavan Kumar Melam (Expert)
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07 March 2016 As per the query, your client, his wife and daughter are owners of the piece of land under sale. On its sale, the sale proceeds are to be paid according to their respective ownership of the land. Refer provisions of section 49 to consider the cost to previous owner and also refer Veena J Shah's case law to take the benefit of indexation from date of holding of the capital asset by their ancestors.

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