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Capital gain on sale of rural agricultural land

ITR 389 views 1 replies

Shashank

Seniour Audit Executive

24 Points Joined November 2013

Dear All,

I have sold a Rural Agricultural Land in FY 2015-16 of Rs.9,00,000.00 and its Value as per Govt Record is something near to Rs1000.00 as on 01.04.1981. As we all know that capital gain on such transfer will be exempt from tax but while filing ITR 4 as I have some business income also where to depict this capital gain. Whether Under Capital Gain Block or whether under Section 10? If Under Capital Gain or Under section 10, Please do mention the Section under which this Capital Gain will be exempt.

Thanks and Regards

Replies (1)

CA Harshal Totla

Chartered Accountant

2229 Points Joined May 2014

Section 2(14) of income tax act,1961 which defines capital asset, excludes rural agricultural land from its scope and mentions the criteria to decide whether a particular agricultural land is rural agricultural land is not. If your agricultural land satisfies this criteria then it will be rural agricultural land and where the asset itself is not a capital asset, no capital gain shall arise on its transfer.
Hence the above receipt is outside the purview of income tax.
Section 10 is a different provision which deals with exempted(tax free) incomes and receipts. It has nothing to do with income from sale of agricultural land.