Long term capital gain on agriculture land

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bhavesh (Querist)
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04 January 2013 If land is situated within 8 KM of nearest Municipal limits but in area which is not notified by Government, do LTCG is applicable?
Thanking you in advance,
Bhavesh

CA Roshan Jha

CA Roshan Jha (Expert)
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04 January 2013 Yes, in my opinion the same shall be taxable. As rural agricultural land is defined as land situated within municipal area or within 8 kms from municipal area or ...........notified area etc. Hence if the land is situated within 8 kms than it need not be notified.

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Prakash Kochar

Prakash Kochar (Expert)
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05 January 2013 Not agree with reply of Mr. Roshan Jha.

The agricultural land not situated within the jurisdiction of Munciple area in general or ii) not situated within the distance from local limits of municipality notified in the official gazzette by Central Govt.
Land situated near the Municipality which are not covered under notification issued in this behalf will not attract LTCG. Such agri. land are out of perview of Capital asset.

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bhavesh

bhavesh (Querist)
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05 January 2013 Dear Sirs, Thank you very much for your prompt reply. It doesn't look like black or white, its grey zone. It will be at whims and fancy of officer to decide.
For in depth discussion, have a look at judgement of Karnataka high court-

https://taxguru.in/income-tax-case-laws/relevant-notification-land-8-kms-municipality-limits-deemed-agricultural-land.html

Will wait for reply.

Prakash Kochar

Prakash Kochar (Expert)
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06 January 2013 In the case cited, AO has treated the agri. land sold is within the area of 8 Km from Munciple limits therefore LTCG attracts.

Tribunal has decided the matter in favor of assessee on the ground that, the land is situated in jurisdiction of Adakemaranahalli village, the population of which is less than 10,000 but is not within Dasarahalli City Municipal limits.
The issue of 8 Km distance from jurisdiction of Muncipality area is not considered being Central Government has not issued any notification in terms of Section 2(14)(iii)(b) of the Act for this Muncilality.

Hon. High Court has also decided the matter in favor of appellant, considering the above reason as in para 12.

Agri. land situated out of Muncipality area or situated near the area which are not notified is not covered by definition of capital asset and being agri. land will not attract LTCG, in case of query asked.

Kindly reply if otherwise.
09850350854 kochar.prakash@yahoo.com

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