Sale of agricultural land

Hi,

Any comments on this please... Thanks for your update

Hi Raj

If the agriculture Land is in rural area, then it will not attract any capital gain tax at all.

But if it is in urban area, then the liability of capital gain tax will arise and the seller has to pay that tax.

It will be calculated on Rs 25000 - Indexed cost of that land/cost of land.

Please read section 54 B for any exemption from LTCG.

Agri land in rural area than exempt from Tax

If in urban area than agreement value ll be considered sales value subject to few cases

and Capital Gain taxable as per slab rate if STCG &  20 % if LTCG

Hi,

Thanks for your reply. Yes, it is in rural area.

However, my question is, the sale deed shows the land was sold for 15,000/- but cash actually received was 25000/-.

So, 10,000/- would be called as black money right. If yes, then whether it would attract tax and to what extent.

It's common practice to undervalue deed,

It's open secret

Coming to the point yes 10000 is black money and figure of 25000 is not at all relevant don't think you have received 25000 its only 15000 only as shown in Deed

Tum kon se 10000 ki bat kar rahe ho wo to he hi nahi

That's actually nice to hear.

What if you have deposited the 25000 in your bank account and your Assessing officer asks details about the transaction. How would you justify if the amounts are in lakhs and you don't have any other income source other than salaries.

I dont think if any one receives black money in lakhs will deposit in bank. Does so and deposits on a day that is closer to the sale transaction then it is very difficult to justify the source, that too without any other income than salary.

However, if the same was spent for constructing a house. Is this fine?

And how about the Tax factor. How much percentage will be charged (Penalty)

Hi Raj.

No tax will be payable under the Income Tax Act, 1961. Penalty may be imposed under the Registration Act, 1908

We bought a urban land, not an agricultural land, for Rs. 18300/- with a stamp paper charges and other expenses of Rs. 5000/- in March 1997 and we put up normal fencing and cleaned the land in March 1997 itself for Rs. 5000/- and sold the said land for Rs. 800,000/- and received the cheque for full amount in August 2011.  I am yet to deposit that cheque and waiting for the confirmation of buyer for depositing the same. What will be the LTCG tax on this income, if the assessee is a senior citizen without any income other than this, this year (AY 2012-13). Will they apply 20% flat rate of tax or will it be treated as income for this year and the tax has to be paid on the basis of income tax slab.  Kindly clarify and I will be thankful to you.

IN YOUR CASE SEC 50 C APPLY................................

YOU HAVE TO SHOW ONLY 15000 BUT NOT 250000.

FOR YOUR QUERY OPEN ANOTHER DUMMY ACCOUNT IN BANK  NEGOTIATE WHITE AMOUNT(rS. 15000) IN WHITE ACCOUNT AND ANOTHER 10,000  IN DUMMY ACCOUNT.

YOU HAVE TO TAKE 15OOO BY CHEQUE AND 10,000 IN CASH,

YOUR PROBLEM SOLVE......

https://www.tax4india.com/income-tax-india/penalties-under-income-tax.html

271(1)(c )would apply 

We bought a urban land, not an agricultural land, for Rs. 18300/- with a stamp paper charges and other expenses of Rs. 5000/- in March 1997 and we put up normal fencing and cleaned the land in March 1997 itself for Rs. 5000/- and sold the said land for Rs. 800,000/- and received the cheque for full amount in August 2011. I am yet to deposit that cheque and waiting for the confirmation of buyer for depositing the same. What will be the LTCG tax on this income, if the assessee is a senior citizen without any income other than this, this year (AY 2012-13). Will they apply 20% flat rate of tax or will it be treated as income for this year and the tax has to be paid on the basis of income tax slab. Kindly help me in this regard and I will be thankful to you.