Taxability of income
This query is : Resolved
22 July 2008
HELLO FRIENDS
I HAVE FEW DOUBTS ON CERTAIN ISSUES.
CASE STUDY : X IS A SALARIED EMPLOYEE . HIS ITR 1 IS FILED. NOW IN P/Y 07-08 HE SOLD HIS RURAL AGRICULTURAL LAND ACQUIRED THROUGH GIFT FROM FATHER , GRANDFATHER AND SO ON..... TO GOVERNMENT FOR 1 CRORE .
NOW THE QUES IS WILL IT BE TAXABLE. AND SECONDLY WHICH ITR WILL BE SUITABLE .
AND IF IT IS NOT TAXABLE BECAUSE OF THE NATURE RURAL AGRICULTURAL LAND , THAN IN THAT CASE WHERE IT WILL BE SHOWN IN ITR AND AS WHAT ?????
IF ITS NOT SHOWN THAN IN FUTURE QUES CAN ARISE FROM WHERE DID HE GET 1 CRORE IN HIS BANK ACCOUNT .
I HAVE FEW DOUBTS ON CERTAIN ISSUES.
CASE STUDY : X IS A SALARIED EMPLOYEE . HIS ITR 1 IS FILED. NOW IN P/Y 07-08 HE SOLD HIS RURAL AGRICULTURAL LAND ACQUIRED THROUGH GIFT FROM FATHER , GRANDFATHER AND SO ON..... TO GOVERNMENT FOR 1 CRORE .
NOW THE QUES IS WILL IT BE TAXABLE. AND SECONDLY WHICH ITR WILL BE SUITABLE .
AND IF IT IS NOT TAXABLE BECAUSE OF THE NATURE RURAL AGRICULTURAL LAND , THAN IN THAT CASE WHERE IT WILL BE SHOWN IN ITR AND AS WHAT ?????
IF ITS NOT SHOWN THAN IN FUTURE QUES CAN ARISE FROM WHERE DID HE GET 1 CRORE IN HIS BANK ACCOUNT .
22 July 2008
REPLY AT THE EARLIEST
23 July 2008
Hi Divya,
In this case that assessee should file his/her return in form ITR-2 & should properly disclose the sale of agricultural land & should claim the expeption for the same. That's it.
In this case that assessee should file his/her return in form ITR-2 & should properly disclose the sale of agricultural land & should claim the expeption for the same. That's it.
23 July 2008
ITR-2 can be used..
Sale of agricultural incme is exempt..
Sale of agricultural incme is exempt..
23 July 2008
Section 2(14)(iii) defines agicultural land as a capital asset if it is situated in any area which in the jurisdiction of any municipality, cantonment having a population of not less than 10000 is a notified area.
Also, any are covered within 8 KMS of the limit of the Municipality, cantonment can be held to be a capital asset.
As such, any gain on sale agricultural land which is a capital asset as defined in section 2(14) will be taxable under the Income Tax Act.
The gain on land received as a gift from father or forefathers will be taxable in his hands. However, the cost of acquisition will be the cost of acquisition of the first in the chain who has acquired the land or value as on 01.04.1981, as the case may be.
The exemption may be claimed u/s 54B if investment is made in new agricultural land within one year before or two years after the date of sale.Exemption may also be taken by deposit in the Capital Gain Scheme for subsequent investment in Agricultural Land.
Land taken by the Government under the Land Acquisition Act is also taxable. Subsequent, compensation received in proceeding years will also be taxable as capital gains with cost of acquisition taken as nil.
In case the land is a capital asset and gain on sale is to be returned as Capital Gains under the Income Tax Act, then return is to be submitted on Form No ITR-2 otherwise ITR-1.
Also, any are covered within 8 KMS of the limit of the Municipality, cantonment can be held to be a capital asset.
As such, any gain on sale agricultural land which is a capital asset as defined in section 2(14) will be taxable under the Income Tax Act.
The gain on land received as a gift from father or forefathers will be taxable in his hands. However, the cost of acquisition will be the cost of acquisition of the first in the chain who has acquired the land or value as on 01.04.1981, as the case may be.
The exemption may be claimed u/s 54B if investment is made in new agricultural land within one year before or two years after the date of sale.Exemption may also be taken by deposit in the Capital Gain Scheme for subsequent investment in Agricultural Land.
Land taken by the Government under the Land Acquisition Act is also taxable. Subsequent, compensation received in proceeding years will also be taxable as capital gains with cost of acquisition taken as nil.
In case the land is a capital asset and gain on sale is to be returned as Capital Gains under the Income Tax Act, then return is to be submitted on Form No ITR-2 otherwise ITR-1.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- About TDS & Income Tax
- Pass word to open justification report for Q1 for FY 2026-27
- PPF interest-As Exempt Income disclosure
- Section 194JA & JB Income which ITR Form to use
- Scrutiny and reopening of past returns
- Type of Capital Gain
- F & O PROFIT REPORTING FOR AY 2026-27
- Booth for sales promotion
- Difference in GSTR3B system generated which is correct and actual Payment it asks
- GST ON TRAVELLING BILLS
- TDS on Rent received on redevelopment of building
- Tax on Deemed Capital Gain
- Indian IT Portal issue in computing tax as per UK-India DTAA
- Capital Gains on sale of residential flat
- Upload Level ValidationITR3Category of Defect B/D
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
- Interest credited in FY2025-2026 & TDS therein by EPFO does not reflect in AIS or Form 26AS
- 44ad eligble money lending interest
- Taxation in the hands of Landowner under JDA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
