Capital gains on sale of agricultural land

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Prajna Adiga (Querist)
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18 September 2018 Why is section 54b of Income Tax Act,1961 applicable on capital gains on sale of agricultural land, when agricultural land not considered as a capital asset & gains from sale of agricultural land is exempt??

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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19 September 2018 Section 54b applicable for urban agricultural land not exempt from capital gains.

Prajna Adiga

Prajna Adiga (Querist)
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22 September 2018 Thank you sir, but it is not specifically mentioned as per definition of agricultural land about rural or urban agricultural land. How do we differentiate?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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22 September 2018 As Per Section 2(14 )” capital asset” means property of any kind held by an assessee, whether or not connected with his business or profession, but does not include-

(iii) Agricultural land in India, not being a land situated-

a) In any area which is comprised within the jurisdiction of a municipality (whether known as municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand [according to the last preceding census of which the relevant figures have been published before the first day of the previous year]; or

b) In any area within the distance, measured aerially,–

(I) Not being more than two kilometers, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten thousand but not exceeding one lakh; or

(II) Not being more than six kilometers, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than one lakh but not exceeding ten lakh; or

(III) Not being more than eight kilometers, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten lakh.

Prajna Adiga

Prajna Adiga (Querist)
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23 September 2018 Thank you sir, got clarity about the urban agricultural land.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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23 September 2018 Welcome...............

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