Hi to all,
I am purchasing one rural agriculture land in maharashtra say 50 acres, now I want to do its developments work, take the NA permission and sale the plots by plotting to the proposed customers.
The land is situated at rural area with no area surrounding 8 KM is having population more than 10000.
Now my query is "will the transaction is termed as sale of rural agriculture land and will be Taxfree?" or it will be taxed.
I think if you have to do some developmentaly work like a layout, town or anything you will have to pay the government some conversion charges or betterment charges.
Once you do that the agricultural land becomes urban property and hence the sale will be taxable.
Praveen I agree with you that I will have to pay some development charges to Government for layout. But still the property remains in a rural area.
Is the property still termed as a rural agriculture land and will be taxfree???
When you pay development charges you are converting the agricultural land to non - agricultural land.
You cannot claim exemption once when it is converted.
Probably as a tax saving measure you could first sell the agricultural land as it is to a company or so and then do the developmental activity. But whether you can transfer the agricultural land to a company or so as agricultural land is one thing you will have to enqure.
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