Tax liability on Sale of Plot which was received as compensation of agriculture Land acquision?

Dear Professional collegues,
Please give your valuable views over Tax liability on Sale of Plot which was received as compensation of agriculture Land acquision?
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Quick Summary
This discussion explores the tax liability when selling a plot that was received as compensation for agricultural land acquisition. It highlights that capital gains on compensation for compulsory acquisition of urban agricultural land are exempt under Section 10(37) of the Income Tax Act. Furthermore, capital gains tax is not levied on the sale of rural agricultural land as it's not considered a capital asset.

Under Section 10 (37) of the Income Tax Act, Capital Gains on compensation received on compulsory acquisition of urban agricultural land is exempt from tax.

Capital Gains Tax on Sale of Agricultural Land in Rural Area

As per the Income Tax Act, the Rural Agricultural Land has been exclusively excluded from the definition of Capital Asset. Rural Agricultural Land is not a Capital Asset; hence the Income Tax as Capital Gain Tax on the sale of such rural agricultural land won’t be levied, irrespective of the amount involved in the transaction, no capital gain would be levied on the sale of rural agricultural land.

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