Sale of Agricultural Land

Sirs

My client, a partnership firm involved in real estate development had bought a agricultural land in 2005, about 50 kms away from the municipality and in an area with surrounding 8 km radius, population lower than 10000 as per census 2001. The firm is selling the Agricultural Land now, in 2009 after 4 years. The property is still an Agricultural Land and my client has been doing Agricultural activities on the said land, and generating nominal agricultural income every year.

Is the capital gain on the sale of such agricultural taxed under the head Capital Gain Tax? Reply at the earliest...

Replies (6)

As i think sales of agriclutural land is not a kind of capital assets transfer,so there is not any kind of capital gain libility??
 

if i am wrong,plz make me correct??

thanks in advance.

 Agriculture land will be exempt from capital gain

It will be exempt from CG tax as it satisfies both the conditions laid out by the Act

and agri activities have been carried out on the land for past two years..

 You should specifically note that Capital gain arising on sale of only Rural Agricultural land is totally exempt from tax.. As the land in question satisfies both the condition of Rural Agricultural land, its capital gain is exempt from tax

sale of agricultural land is totally exempt .. so not to worry about that ....

 

Regards,

Varun Makhija

It is exepmt from capital gain tax...as it satisfies both the condition laid down by the act in sec2(14).....

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