28 July 2008
For this purpose the agricultural land as appearing in the definition of capital asset u/s 2(14)(iii) is to be considered. As per the said section, any agicultural land which is not situated in any area within the jurisdiction of a municipality or a cantonment having a population of 10000 or more or any area within 8 KMS from the limit of such municipality or cantonment is not a capital asset. Conversely, any land within such limits will be capital asset and the gain arising from the sale of such land shall be a capital gain under income tax act.
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