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Taxability on sale of Rural Agriculture Land

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This query is : Resolved

Jay V (Querist)

02 September 2021 Rural Agriculture Land situated outside municipal area (i.e more than 8 k.m) is not a capital asset as per sec 2(14),

Question is, this land will be sold to a PVT Ltd Company under sec 63AA of The Gujarat Tenancy and Agricultural Land Act, 1948 and after-sale , the land will be converted into non-agriculture by PVT Ltd company and all costs bear by the company itself.

Now can I take the above transaction cover under Sec2(14) or I suppose to pay long term capital gain?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

02 September 2021 Question here is the status of the land on date of transfer deed.
If transferred as it is, i.e. as rural agri. land. it will not be taxable.
But if transfer takes place after its conversion, question of CG will arise. As it will be converted to capital asset.

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