RURAL AGRICULTURAL LAND CAPITAL GAIN EXEMPTION CRITERIA

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Suresh S. Tejwani (Querist)
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08 June 2026 To check if a property qualifies as exempt rural agricultural land under Section 2(14), how do we measure the 2/6/8 km distance? If the land is located near a Municipal Corporation, a Gram Panchayat, and a local authority like JADA, which boundary's population criteria determines the tax exemption?

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
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08 June 2026 To qualify as an exempt rural asset, the land must be located outside the statutory limits of a municipality/corporation and must exceed the aerial (straight-line) distance thresholds of 2 km, 6 km, or 8 km, which are determined based on whether the adjacent municipality's population exceeds 10k, 1 lakh, or 10 lakhs respectively. The distance must be calculated from the boundary of the Municipal Corporation, not regional development bodies like JADA, and if the land falls within these radiant limits of a city, it will be categorized as taxable urban land regardless of its placement inside a local Gram Panchayat.

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