Question ID : 29558

capital gain on rural agri land

Dear professional colleagues, Namaskaar ! Mr.X an individual purchased a rural agricultural land on 01.03.2017 at Rs.1 lac. On 31.12.2017 he sold the land to a pvt ltd company at Rs.1.5 Lacs. The proposed use of land by company is industrial. What are tax implications in the hands of Mr.X ? Regards CA R K Choudhary

Answer ID : 65442

the proposed use of land is not relevant and the nature of the land at the time of sale is to be considered.

Answer ID : 65449

If land used is not changed till date of sale and the agreement to sell is mentioned as agricultural land then there is no tax liability at all . but if the land use changed before sell then STCG will attract

Answer ID : 65453

As per Section 2(14), Agricultural land situate outside the specified area is not a capital asset. Hence there is no capital gain tax. Profit is below exemption limit, so no tax implication assuming there are no other incomes

Answer ID : 65480

If it is the only income no tax at all. Otherwise short term CG applies if it is a capital asset as per 2(14). Even it is Agricultural land it is taxable if it is in specified limit. Refer the capital asset definition.

Answer ID : 65491

First of all decide the land is Capital Asset or Not as per sec. 2(14). If it is capital Asset STCG is taxable otherwise no tax.

---