Wealth tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 December 2012 agriculture land is situated within 8 km of municipality area.
not a single process done by the assessee on this agriculture land from 2 years.

Is it taxable under wealth tax or not?

Pankaj Gupta

Pankaj Gupta (Expert)
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27 December 2012 It will be not considered as agriculture land. Hence taxable.

Querist : Anonymous

Querist : Anonymous (Querist)

28 December 2012 please visit FORUM > TAX QUERIES > WEALTH TAX > read attach file...

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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03 August 2025 Yes, **the agricultural land in your case may be taxable under the Wealth Tax Act**, based on the details you've provided. Here's a clear breakdown:

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### ✅ **Wealth Tax Applicability on Agricultural Land**

Under the **Wealth Tax Act, 1957** (now abolished w\.e.f. A.Y. 2016-17), **urban land** was considered an asset and hence taxable. Agricultural land **was generally exempt**, but **not always**.

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### 📌 In Your Case:

* **Land is within 8 km of a municipality area** ✅
➤ This **qualifies it as “urban land”** under Wealth Tax Rules.

* **No agricultural activity done in 2 years** ✅
➤ This indicates **the land is not being used for agricultural purposes**, and **may not qualify for agricultural exemption**.

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### 🔍 As per Section 2(ea) of the Wealth Tax Act:

> *“Urban land” means land situated within 8 km of a municipality, and not being used for agriculture in the preceding two years, is taxable as an asset.*

So yes, if the land:

* Is within 8 km of a municipality, and
* Not used for agricultural purposes for 2 years

➡ **It will be considered urban land** and is **taxable under Wealth Tax**.

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### 🧾 Taxable Value:

The land should be valued as per **Rule 3 of Schedule III** of the Wealth Tax Act — usually based on **Fair Market Value**.

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