capital gains on transfer of agriculture land

1 .I HAVE AGRICULTURAL LAND LOCATED IN VILLAGE PANCHAYAT LIMITS.THIS LAND IS COMPULSORLY ACQUIRED BY STATE GOVT .I AM GETTING CAPITAL GAINS ON THIS TRANSACTION.DI I HAVE TO PAY LONG TERM CAPITAL GAINS TAX ON THIS TRANSACTION.

THIS LAND HAS BEEN AQUIRED IN AUG 2009. AND COMPENSATION WILL BE PAID IN APRIL 2010. IN WHICH ASSMT YEAR THE GAINS TO BE ACCOUNTED FOR. IF AT ALL CAPITAL GAINS TAX HA S TO BE PAID.

2. I HAVE NET SHORT TERM CAPITAL GAINS ON SALE OF SHARES (STT PAID) AND NET LONG TERM CAPITAL LOSS ON SALE OF SHARES (STT PAID) IN THE SAME ASSMT YEAR. CAN SHORT TERM CAPITAL GAINS BE SETOFF AGIANST LONG TERM CAPITAL LOSS.

3.CAN LONGTERM CAPITAL LOSS ON SALE OF SHARES (STT PAID) BE CARRIED FORWARD FOR NEXT 8 YRS TO BE SET OFF .

Replies (3)

1)   If agrecultural land is urban agrecultural land then u have to pay capital gain tax. It will be long term capital gain.

 As per the provision of income tax, capital gain tax is to be paid in the year in which the compensation is received for compulsary acquisition.

in ur case it will be A.Y. 2011-12.

2) Long term capital loss on share is exempt u/s 10(38) if STT is paid. No loss can be set off aginst exempt income.

As per the provision of set off and Carried forward losses, LTCL can be set off against LTCG only.

3) LTCL/ LTCG is exempt u/s 10(38) if STT PAid, therefore, can not be carried forward.

LTCL on any other transaction can be carried forward for 8 Assessment years.

 

 

Dear Cheena,

1)  LTCG on Urban agriculture Land in case of compulsory acqusition will be exempt u/s 10(37) if

such land, during the period of two years immediately preceding the date of transfer, was being used for agricultural purposes by such Hindu undivided family or individual or a parent of his;

 

2) & 3) Long Term Capital Loss on which STT has been paid is a dead Loss and cannot be setoff with any other Income. It cannot be carried forward also.

In the particular case as the agricultural land is situated in the panchayat limits of a village it is not a capital asset and therefore no tax on capital gain on such transfer has to be made

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