Sale of agrilculture land exmpted for aerial distance calculation procedure for online

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Agricultural land is exempt from capital gains if located in rural area under Sec 2(14). Rural status depends on population and aerial distance (2/6/8 km from municipality). Distance is measured straight-line via tools like Google Maps. If criteria met, sale is exempt; otherwise taxable.

Kollipara Sundaraiah

Kollipara Sundaraiah (Querist)

28 November 2025 sir,
it tax payer sale of agrilculture land exempted for aerial distance sale land with nearest place municipality calculation procedure for online plotfarms.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

28 November 2025 Section 2(14)(iii) of the Income-tax Act, 1961 defines “capital asset.”
• Agricultural land in rural areas is not a capital asset → sale proceeds are exempt from capital gains.
• Agricultural land within certain limits of municipalities/cantonments is treated as a capital asset → taxable.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

28 November 2025 - Distance Criteria (post 2014 amendment):
- The land must be beyond 2 km, 6 km, or 8 km aerial distance depending on the population of the nearest municipality/cantonment board.
- Measurement is strictly aerial distance (straight line), not road distance.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

28 November 2025 How to calculate Aerial Distance:
Aerial distance means the straight-line distance (as the crow flies) between your village and the nearest Municipality or Cantonment Board. You can easily measure it using Google Maps. Here’s how:
Open Google Maps.
Search and right-click on your village location (e.g., Wagholi, Pune).
Select "Measure distance".
Click on the location of the nearest Municipality or Cantonment Board.
Google Maps will show the aerial distance in kilometers (KM).

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

28 November 2025 To determine whether your land is classified as Rural Agricultural Land (exempt from Capital Gains Tax) or Urban Agricultural Land (taxable), use the rules below:

Population ≤ 10,000: Land is considered rural regardless of distance.
Population > 10,000 and ≤ 1,00,000: Land must be more than 2 KM from the municipality or cantonment board.
Population > 1,00,000 and ≤ 10,00,000: Land must be more than 6 KM from the municipality or cantonment board.
Population > 10,00,000: Land must be more than 8 KM from the municipality or cantonment board.

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