Head for taxation

Originally posted by : Vikrant Singh
	income from sale of agricultural land sold for non-agricultural purpose is assessable under which head????

Generally  "Agricultural land situated in Rural Area " is not considered a "Capital asset " as per the IT act provisions so no Capital gains issue/applicability on such Land  BUT few points are to be taken into considered before this :

* Land Should fall under the under the definition of " Agricultural Land in Rural Area (**criteria for same is given at the end of this post)"
* Before sale the status of the land should not  have changed/converted (by any means..like sale deed or any other document) to non Agricultural land.
 

" Agricultural land in Urban area " is treated as a capital asset as per the IT act so Capital gains and tax on same will be there in such cases excemptions (exemptions as per sec. 54 applicable). 

** Agricultural Land in Rural Area : --

 * Where the agricultural land situated in an area within the jurisdiction of the municipality or where the population is less than ten thousand.

 * Where distance of the agricultural land from municipality and population limit is as under:
   (1) Distance from municipality >  Under 2 kilometres       AND        Population > 10,000 to 1,00,000.
   (2) Distance from municipality >  2 km to 6 km                AND        Population > 1,00,000 to 10,00,000.
   (3) Distance from municipality >  6 km to 8 km                AND        Population > Above  10 lakhs.