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Sale of Non-agriculture land

gautam kathiriya (student) (36 Points)

27 July 2021  

Dear Sir/Madam,

       I have query related to sale of Non-agriculture land.My client sale non agriculture land to partnership firm.After sale of land my client become partner in that partnership firm and sale proceed of land introduce as share of partner capital  in the firm.How can i formulate this transaction for minimum tax liability of my client.

  Please help me with this issue.




 6 Replies

Hari Beldona (ACA) (1517 Points)
Replied 27 July 2021

As it is not mentioned non- agriculture land is short term/long term
short term - 24 months
long term -36 months
if it is short term taxable like any other income
if it is long term as below
From gross sale proceeds the following will be deducted:
1. Indexed cost of aquisition
2. Indexed cost of improvement
3. Expenses incurred for sale of asset, example brokerage
Net proceeds taxable at flat rate of 20% irrespective of other heads of income
10% is also applicable on an average if more than one asset is sold

gautam kathiriya (student) (36 Points)
Replied 29 July 2021

Dear Hari Beldona Sir,

       My client purchase Agriculture land in 2005 and in current year i.e.2021 converted in to Non-agriculture land and then sold to partnership firm.

Hari Beldona (ACA) (1517 Points)
Replied 29 July 2021

Reply as above, conversion of N.A., cost will come under cost of improvement

gautam kathiriya (student) (36 Points)
Replied 30 July 2021


What is the period of holding of Non Agriculture land? Is it from conversion of Agriculture to non-agriculture land or when it is actually purchased i.e.from 2005

Hari Beldona (ACA) (1517 Points)
Replied 30 July 2021

From the date of purchase

gautam kathiriya (student) (36 Points)
Replied 30 July 2021

Thank you sir,

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