Sale of agricultural land in India

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This discussion addresses the tax implications for a Person of Indian Origin (PIO) and Canadian citizen selling ancestral agricultural land in India. Key points include the buyer's obligation to deduct TDS at 20% plus surcharge and cess, and the seller's need to file an Income Tax Return (ITR) to reclaim this if the land is rural. Capital gains tax applies to urban agricultural land sales, while gains from rural agricultural land used for farming are typically exempt from long-term capital gains tax.

navjot pannu

navjot pannu (Querist)
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20 March 2021 - Ancestral Agricultural land has been sold in India by a person of Indian origin who is currently a Canadian Citizen.
- Money has not been repatriated.
- Are there any taxes to be paid by the seller on sale of agri land ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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20 March 2021 20% plus sc and cess has to be deducted at source by the buyer.
Seller has to file ITR and get back the TDS deducted in case of rural agricultural land.
Capital gains tax payable in case of urban agricultural land.

PARAS CHHAJED

PARAS CHHAJED

(Expert)
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21 March 2021 Buyer needs to make TDS u/s 195. The seller may request for lower deduction of tax at the source.
Long Term Capital gain on sale of Rural agricultural land used for agriculture is exempt. Gain on sale of Urban land is taxable.

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