clubbing Agricultural income for tax rate purposes

I think that capital gain will be calculated on the above agricultural land.

IT IS NOT THE AGRICULTURAL INCOME

IT IS THE CAPITAL RECEIPT

HENCE NOT TAXABLE.

Guys, the agriculture income is the one which is earned due to cultivation on agriculture land and not by selling the land itself...

If land is sold, its not at all agriculture income, its obviously a capital asset and so that goes for capital gains,.. But land being rural, even capital gain is not taxable...

So, neither such income is taxable nor is it useful in claiming exemption u/s 54B

In the given case agricultural land is not a capital asset. So no capital gain and no taxation. The receipt from sale of such land is a capital receipt.

i agree fully with Mr. Dhiraj full info with valid reason

Originally posted by : SAGAR
	IT IS NOT THE AGRICULTURAL INCOME IT IS THE CAPITAL RECEIPT HENCE NOT TAXABLE.

fully agree wid Sagar.

 Fully agree with Mr. Dhiraj

But make sure that land is not situated within 1 Km from any National Highway. In this case, it will be taxable, i think

Originally posted by : D н ! я σ √
	Guys, the agriculture income is the one which is earned due to cultivation on agriculture land and not by selling the land itself...   If land is sold, its not at all agriculture income, its obviously a capital asset and so that goes for capital gains,.. But land being rural, even capital gain is not taxable...   So, neither such income is taxable nor is it useful in claiming exemption u/s 54B

agree

 by NISHANT on 19/12/2009

Section 2(1A) of the Income Tax Act defines agricultural income as "any rent or revenue derived from land which is situated in India and used for agricultural purposes....."

Further explanation to this section states that : "For the removal of doubts, it is hereby declared that revenue derived from land shall not include and shall be deemed never to have included any income arising from the transfer of any agricultural land situated in urban limits."

On the basis of above explanation  that " revenue derived shall not include income arising from transfer of specific land ",  it can be conferred that :

(i) the term "revenue" includes income arising on transfer of land; and (ii) if such land is situated outside urban limits, then such income on transfer would amount to revenue derived from agricultural land if such land is used for agricultural purposes (irrespective capital or revenue receipt)

It seems that : income arising from transfer of land situated outside the  urban limits would not amount to agricultural income if such land is not used for agricultural purposes and hence cannot be used for Tax Rate Purposes.

The below mentioned Text in Italics has been procured from link:

"https://elagaan.com/income-tax-blogs/profits-arising-transfer-rural-agricultural-land-are-not-liable-mat"

Profits arising on transfer of rural agricultural land are not liable to MAT

Ss. 2(1A), 115JB; A/y 2005-06; in favor of taxpayer: Profits arising on transfer of rural agricultural land amounts to agricultural income under section 2(1A). Such income cannot be included in the total income under section 10(1). Section 115JB provides that any income, listed under section 10, other than the ones listed in clause (38), shall be reduced from the book profit

Whether the income arising from transfer of rural land used for agricultural purposes can be included in agricultural income for tax rate purposes?

My Conclusion : Yes

If such land is not used for agricultural purposes?

My Conclusion : No

Further the income on transfer of agricultural land in rural area would not attract capital gain tax because 

(a) it is not a capital asset or

(b) such transfer amounts to agricultural income

My Conclusion : More specifically (a) however (b) should be admitted.

yaaa, i agree with dheeraj

I also fully agree wid Dheeraj..

but i wanna add 1 more situation in the question raised...

If assesse is doing the same very often just like his business of sale n purchase of the rural agricultural land along wid his agricultural activities on the same land which he used to sale..

Now wat will be the status ??

Adarsh

Thanks Dear Nishant!!

what an excellent reply..

i was searching for the tax impact on account of MAT but u have also covered that portion also.

thanks very much.

CA Rakesh Daswani