Is the gain from the sale of Agricultural land is exempted from Capital gain tax?
Sumiti Jain (FP) (1364 Points)
18 February 2011Is the gain from the sale of Agricultural land is exempted from Capital gain tax?
Pankaj Arora
(Learner)
(3134 Points)
Replied 18 February 2011
It will be taxable except rural area land.. If its LTCG you can invest this in buying new agriculture land or rest will be taxable.
Manoj BG
(Tax Professional and in Service)
(1795 Points)
Replied 18 February 2011
Hi,
If agricultural land is a rural agricultural land, then its always be exempted as it is not at all a capital asset itself. so no capital gain tax applicable in case of rural agriculral land.
In case of urban agricultural land, sale if generating gain, would chargeable to capital gain tax whether short term or long term. However, if urban agricultural land is hold for more than 36 months (i.e. Long term capital asset), then u have the option of reducing tax burden by investing the specified avenues mentioned under section 54B (i.e. buy investing in new agricultural land), or 54EC (by investing in notified bonds-maximum upto 50 lakhs) or by investing in residential house under section 54F.
Hope this solves ur query
Thanks and Regards,
Manoj B. Gavali
CAclubindia
