Sale of Rural Agriculture land taxation

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The discussion explores whether profits from selling rural agricultural land are considered agricultural income and thus exempt from capital gains tax. While the sale of rural agricultural land is generally exempt from capital gains tax as it's not a capital asset, the profit itself isn't typically classified as agricultural income. Agricultural income is usually derived from the use of the land for farming purposes, not from the sale of the land itself.

Satish Mehra

Satish Mehra (Querist)
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29 September 2022 Can the profit from the sale of Rural agricultural land be deemed as agricultural income?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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29 September 2022 Why deemed income?
Any gains from Sell/transfer of rural agricultural land is exempt under income tax act...

Satish Mehra

Satish Mehra (Querist)
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29 September 2022 With due respect sir, what I am interpreting is please correct me if I am wrong,
1- Rural Agricultural land is not a capital asset so it is exempt from Capital Gain.
further
2- Sec 10 (1) definition of Agricultural income "(a) Any rent or REVENUE derived from land which is situated in India and is used for agricultural purposes."
My point is Profit from the sale of Rural agricultural land is "a REVENUE" derived from that agricultural land. So, it can be deemed as Agricultural income which is exempt but adds up to total income to define the slab rates.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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30 September 2022 REVENUE derived from land which is situated in India and is used for agricultural purposes.
Here receipt is not from usage of land for agricultural purposes. But it's a capital receipt on sale of land not to be considered as agricultural income.
Such sale is exempt from tax.

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