Capital GainTax On Sale of Agriculture Land

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Chintan (Querist)

01 March 2010 My grand father had acquired agriculture land before 1970 and is been transferred, inherited, to may father in 1975 and from him it was transferred on my name in 1995. Earlier this land was not fall within municipality limit, but now it have covered under the limit.I want to know whether or not the capital gain tax is applicable? if yes what is the rate?

if i will purchase agriculture land from the sales proceedings then what would be the tax liability.

Kindly let me know if any other tax implications on such transactions?

thank you

shrikant

shrikant (Expert)

01 March 2010 Dear Chintan

Yes this transaction applicable to capital gain tax. You have calculate cost of acquisition on 31 march 82 and take cost of acquisition as your grandfather cost or 1982 cost which ever is high. As this long term capital gain hence chargeable at 20% (3% education cess extra). If you invest in agricultural land then no tax deduction allowed else you can invest in new house (but you dont have house in your name) then you can claim deduction under section 54F.

CMA Arif Farooqui

CMA Arif Farooqui (Expert)

02 March 2010 Yes this transaction applicable to capital gain tax.
cost of acquisition would be --
acquisition cost of asset or fair market value on 1-4-81, which ever is higher.
20% plus 3% education cess.
If you invest in agricultural land then no tax deduction allowed.
deduction can be claim it amount is invested within 6 month from date of transfer u/s 54 EC(max.Rs.50lakhs) or
U/s 54 F, by construction/purchase a new house within 3/2 years respectively from date of transfer, but u must not have more than 1 residential house on date of transfer,

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