Taxability on sale of agricultural land

No capital gains shall arise on sale of rural agricultural land. Since it is not a capital asset.

Hi Harshal,

Thanks for your reply, can you confirm how the classification of rural land is done?

A rural agricultural land will be one if it is not situated in any area within the distance, measured aerially of not being more than:

1. two kilometers, from the local limits of any municipality or cantonment board and which has a population of more than ten thousand but not exceeding one lakh; or

2. six kilometers, from the local limits of any municipality or cantonment board and which has a population of more than one lakh but not exceeding ten lakh; or

3. eight kilometers, from the local limits of any municipality or cantonment board and which has a population of more than ten lakh

Firstly , confirm whether it's a rural agricultural land or an urban agricultural land. If rural, then no capital gain. If urban, then claim exemption u/s 54B by investing the amount.