SEO Sai Gr. Hosp.
211715 Points
Posted on 15 February 2019
Agricultural land in Rural Area in India is not considered a capital asset. Therefore any gains from its sale are not taxable under the head Capital Gains.
As per section 2 ( 14),
Capital asset means property of any kind held by assessee whether or not connected with his business or profession, but does not include Agriculture land in India not being a land situated
a) In any area which is comprised within the jurisdiction of a municipality (whether known as municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand [according to the last preceding census of which the relevant figures have been published before the first day of the previous year]; or
b) In any area within the distance, measured aerially,–
(I) Not being more than two kilometers, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten thousand but not exceeding one lakh; or
(II) Not being more than six kilometers, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than one lakh but not exceeding ten lakh; or
(III) Not being more than eight kilometers, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten lakh.
Explanation.—For the purposes of this sub-clause, “population” means the population according to the last preceding census of which the relevant figures have been published before the first day of the previous year.
So check with Zila Adhikari to get precise information on the distance and population. As long as the land is beyond the prescribed limits, no tax is payable.
But better to file return and declare the income as exempt income.