Section 10 (37) of income tax act.

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Rakesh B. Surve (Querist)

16 February 2015 my ancesteral land is in municipal corporation having population more than 10 lakh and is a agriculture land. It goes in compulsary aquisition of govt. Received amt after 2004. Does capital gain tax arise in this case.

CA Anjana Grover

CA Anjana Grover (Expert)

16 February 2015 Following is the definition of agriculture Land for a Land to be declared as Agriculture Land should satisfy the follwing criterion as per section 2(14) of Income tax Act.

Agricultural land situated in a rural area. Rural area means any area which is outside the jurisdiction of a municipality or a cantonment board (known by any name), which has a population of 10,000 or more and is not situated in any area within the distance measured aerially as given below :

Within 2 kilometers from the local limits of any municipality/cantonment board, which has a population of more than 10,000, but not exceeding 1,00,000.
Within 6 kilometers from the local limits of any municipality/cantonment board, which has a population of more than 1,00,000, but not exceeding 10,00,000.
Within 8 kilometers from the local limits of any municipality/cantonment board, which has a population of more than 10,00,000.

Population is to be considered according to the figures of last preceding census of which relevant figures have been published before the first day of the year.

If your land is satisfying above local limits than your land is agriculture Land & no tax to be paid on capital gain arising from compulsory acquisition.

Regards

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