02 August 2011
As per Income Tax law profit on sale of agriculture land as defined by the IT Law in the specified area/location is totally tax free.
My question is where to show this Income in the Latest ITR IV form?
First option is we show this amount under the ITEM 4 of Schedule "EI" i.e. " Net Agriculture Income (other then ...)"
Under this situation the Tax calculated by the EXCEL-ITR form is slightly different, it calculates the tax payable on the entire income including the taxable income and the agricultural income then it reduces the tax payable on the agricultural income amount. In this calculation the tax on the balance income which is taxable, increases as the tax calculation is on highest slab. So effectively we end up paying more tax because of agricultural income.
Second option is we can show this amount under the ITEM 6 of schedule "EI i.e. "others, including exempt income from minor child"
under this situation it may create unnecessary attention of the officer that from where the Income arise, even though we are very clear on law. instead if we can clearly specify the detail of income then there is no attention required by the officer.
02 August 2011
It should be shown under exemt income. As if you show it as income from agriculture, then it will be added in income for rate purposes and the term Agricultural Income does not include the proceeds from sale of agricultural land.
02 August 2011
Do you mean it should be shown under the second option i.e. ITEM 6 of schedule "EI" i.e. "others, including exempt income from minor child"
02 August 2011
Agricultural land in rural area is not a capital asset. Therefore its sale value is "excluded" for income tax calculation. It can't be treated as an "exempted income". In the ITR's, no cloumn is provided for "excluded items". Therefore, No way out to show such amounts in ITR's. If shown in "exempted" income (item 6 in E1) it is a wrong disclosure.
06 October 2018
A company selling agricultural land situated in rural India and the profit on such sale is included in profit & loss account, now my question is where to deduct such profit in Schedule BP as it is not my business income nor capital gain ?
CAclubindia
