Profit on rural agriultural land
This query is : Resolved
14 January 2016
IN CASE OF INDIVIDUAL, DO WE HAVE TO SHOW PROFIT ON SALE OF RURAL AGRICULTURAL LAND UNDER EXEMPT INCOME OR NO DISCLOSIRE FOR SAME IS REQUIRED AS THIS IS NOT A INCOME.
14 January 2016
The capital receipts are not chargeable to tax, except on the transfer as per section 47 of capital assets specified in Section 2(14). If both the provisions are attracting (Sec. 2(14) and Sec. 47), then liable for capital gains tax u/s 45(1) in case of gain.
As per section 2(14) first the agricultural land (both rural and urban) is included in the capital asset definition by referring "property of any kind....." and again as per sub-clause (iii) specifically excluded rural agricultural land. Hence, in your case it is a capital receipt but not taxable capital gain.
However, you have to ensure that income from transfer of such land should not be a business income. If you held that agricultural land as stock-in-trade, then income from its transfer amounts to business income. As you written "show profit on sale....", the term "profit" and "sale" are used in PGBP, be careful while disclosing the same.
Regarding disclosure, if you take ITR4, should not disclose any where in sheets "Profit and Loss" or "Part A - OI" or "BP" and there is no provision in sheet "CG" to disclose income on transfer rural agricultural land.
The only sheet available is "EI" schedule, at item 6. In my view, better to disclose here, if you are filing ITR4 for ITR3 also same.
As per section 2(14) first the agricultural land (both rural and urban) is included in the capital asset definition by referring "property of any kind....." and again as per sub-clause (iii) specifically excluded rural agricultural land. Hence, in your case it is a capital receipt but not taxable capital gain.
However, you have to ensure that income from transfer of such land should not be a business income. If you held that agricultural land as stock-in-trade, then income from its transfer amounts to business income. As you written "show profit on sale....", the term "profit" and "sale" are used in PGBP, be careful while disclosing the same.
Regarding disclosure, if you take ITR4, should not disclose any where in sheets "Profit and Loss" or "Part A - OI" or "BP" and there is no provision in sheet "CG" to disclose income on transfer rural agricultural land.
The only sheet available is "EI" schedule, at item 6. In my view, better to disclose here, if you are filing ITR4 for ITR3 also same.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Tax on Deemed Capital Gain
- F & O PROFIT REPORTING FOR AY 2026-27
- Type of Capital Gain
- Exiting partner in partnership firm in gst portal
- Regarding ITR filing with more value than showing in AIS/TIS
- TDS _Long term Capital Gain ref.sec 214 Table 2
- TAX AUDIT QUESTION
- ASMT-10 received from A O
- Banking Related Issue
- ITR-Capital Gain
- Seeking Advice: High Tax Shortfall on Job Switch + Let-Out House Property Loss in FY 2025-26
- TDS offline utility
- TDS on rent received on hardship compensation being rent on redevelopment of building
- Housing Society-ITR5
- TDS on Rent received on redevelopment of building
- Indian IT Portal issue in computing tax as per UK-India DTAA
- Capital Gains on sale of residential flat
- Upload Level ValidationITR3Category of Defect B/D
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
