Tax implication on sale of agricultural land

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 March 2016 My Parents want to sell Agricultural land in rural area and Invest in Bank FD and Senior citizen saving schemes and other investments(But not buying agricultural land).My question is does sale of Agricultural land attracts income tax liability?

Thanks in Advance.

CA SUNIL K GARG

CA SUNIL K GARG (Expert)

28 March 2016 agricultral land in india is of two types . agricultral land situated out of municiplal limits specified under section 2 (14) is not a cpital assets , hence cap[ital gain does not arise on sale of such land . however urban agricultral land sale attracts capital gain , but the exemption can be claimed from tax by three modes . u/s 54 B by investing in agtricultral land , 54 EC by investing ib bonds and 54 F by investing in resdentail house

CA SUNIL K GARG

CA SUNIL K GARG (Expert)

28 March 2016 if the above land is rural agricultral land , than there is no capital gain , hence no tax . your parents can invest in bank FDR

Querist : Anonymous

Querist : Anonymous (Querist)

28 March 2016 Thank a Lot sir.Yes it's a rural Agricultural land.

CA SUNIL K GARG

CA SUNIL K GARG (Expert)

28 March 2016 than enjoy . but tale a certificate from local patwari , that it is out of municiple limit .