Mother sell agriculture land & want to purhcase home for son

Mother wants to sell her agriculture land situated in village and want to purhcase a house for her son in city. My question is 1) Is my mother liable to pay capital gain and if not than under what section of income tax; 2) can my mother purchase home for me in city (Within the boundaries of Nagar Nigam) if yes than under which section; 3) Both us are filling ITR and in which column shall we show the process i.e. my mother sold the agriculture land and purchase of house in my name. Please help me and send detail explanations please at colrsp @ yahoo.in

Replies (3)

1. " Is my mother liable to pay capital gain and if not than under what section of income tax"

If the land is rural agricultural land....... no capital gains tax liability....... 

2) "can my mother purchase home for me in city (Within the boundaries of Nagar Nigam) if yes than under which section;"

Yes, she can purchase home for son, of gift money to son so that he can purchase in his name, as the capital receipt of the mother by sell of rural agricultural land is tax-exempt.

3) "Both us are filling ITR and in which column shall we show the proceeds ?"

Under Exempt income in ITR 2 or ITR 3
 

Refer section 2(14) which defines capital asset and it clearly excludes rural agricultural situated in India but the population of the village/town should be less than 10000
Answers
1. No nit taxable If land is Rural agricultural land.
Read Section 2(14) to know defination of agricultural land. And read Section 45 to know taxability.


2. Yes, Tell her to purchase house in her own name (as stamp duty is less in case of female owner) and after all the formalities fulfilled and house is in the name of mother then tell her to transfer the house in your name as the same is Exempt under section 56(2) because she is your relative as per defination of relative.

3. Under Exempt Income Section of ITR2/3 as applicable.

Hope I nullified your queries.
Pallav Bansal.

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