Sale of agricultural land -tax implications -amaravathi

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Querist : Anonymous

Querist : Anonymous (Querist)

09 November 2016 One of my client sold agricultural land located at Amaravathi @1.5 cr per acre . Amount has been received through cheque 80 lakhs and remaining cash.
Buyer wants to pay through cheque full amount at the time buying.(Buyer is central govt employee. He received the money at the time of retirement). But as per my recommendation , client requested to pay through cheque(HALF) and cash (half)

As per Recent decision of PM to validaity of 500rs and 1000rs. made in dilemma.

How to convert liquid cash (of 500Rs and 1000Rs notes) into white.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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09 November 2016 Deposit the 500 and 1000 notes in the bank and declare the amount deposited in the bank as income from other sources in the IT return and pay applicable taxes.

Querist : Anonymous

Querist : Anonymous (Querist)

09 November 2016 Sir, what is the point to show as other income as that source is sale of agricultural land. Which is exempted from tax.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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10 November 2016 Better to accept the entire amount in cheque as the buyer is willing to pay in cheque and file return claiming exemption.
No cash payments can be accepted exceeding Rs. 20,000 in cash for sale of property.

Querist : Anonymous

Querist : Anonymous (Querist)

10 November 2016 Thanks for the response. As suggested by you, we cant ask buyer now to pay in cheque the entire amount. Deal already closed.
The only option to my client , how to convert the Liquid cash into white money(Since cash transaction excess of 20k) .

Is it ok to go to bank and provide identity proof and deposting into bank account.

later when department send notice, regarding source of income ;can we file return of income stating as agricultural income.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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10 November 2016 The department will not accept it as agricultural income. Penalty of 200% will be levied for deposit in excess of 10 lacs.

Querist : Anonymous

Querist : Anonymous (Querist)

10 November 2016 Agricultural land in rural area is not a capital asset.In such case no capital gain tax will arise on account of sale. In such case , what is the point to show in my return ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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10 November 2016 Check the sale deed value, the value will be for cheque payment. Cash payment might have been received as black money. So deposing such money will pose problem.

Querist : Anonymous

Querist : Anonymous (Querist)

10 November 2016 Thanks sir. But could u suggest me , how can we go ahead in order to make this black money to white.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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10 November 2016 Only 10 lacs can be deposited and applicable tax can be paid on it.

Querist : Anonymous

Querist : Anonymous (Querist)

10 November 2016 Is there is any logic only for 10 Lakhs ( As per ACT ).Why cant full amount

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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10 November 2016 If you deposit full amount then penalty of 200% will be levied.