HI
I HAVE SO MANY QUESTIONS TO ASK, KINDLY HELP ME ON FOLLOWING MATTER
I HAD LAND IN A VILLAGE ( VILLAGE DISTANCE FROM MY CITY IS 10 KM BY ROAD ), WHICH IS AGRICULTURAL LAND. MY NEIGHBOUR AND I DECIDED TO MAKE A PARTNERSHIP FIRM AND TRANSFER OUR LAND TO FIRM AFTER REGISTRY. BOTH OF US WERE THINKING THAT TRANSFER OF AGRICULTER LAND IS NON TAXEBLE, NOW OTHER BUILDER AND PEOPLE ARE SAYING THAT WE HAVE TO PAY INCOME TAX ON THAT TRANSFER.
KINDLY GIVE YOUR EXPERT VIEW ON ABOVE MATTER.
THANKING YOU
Dear Friend,
Capital gain is exepmted for transfer of agricultural land. Hence in your case you have to check whether the land has been actually used for agricultural activities in the immediate previous years(it is preferable to have certain proofs of agriculural income and also if you have filed ITR in previous year with agricultural income then it would be a solid evidence.). If so then check whether the land is situated outside 8 kms of the local limits of muncipality. The distance is aerial and not road distance. If both the conditions are satisfied, then the capital gain is not chargeable to tax.
CAclubindia
