Agri. land sale for ind. purpose

This query is : Resolved

Satish Patel (Querist)
Follow

01 August 2016 We have sold pure Agricultural land Purchased 5 Years before ,20 Kms distanced from city limit ,to a company ,under 63AA clause of Gujarat Land Revenue code which permits Agricultural land sales to a company for bonafide industrial purpose. The reference rates/Jantri for calculating stamp duty for Registration of sale deed are as per Industrial Non Agri. land. Are we required to pay IT on Profit ?

CA CMA CS Ram Pavan Kumar Melam

CA CMA CS Ram Pavan Kumar Melam (Expert)
Follow

02 August 2016 Agricultural land (rural) is excluded from the definition of ‘capital asset’. Hence, there is no capital gain on its sale. What is agricultural land? See the definition as per section 2(14) below:
agricultural land in India, not being land situate:
(a) in any area which is comprised within the jurisdiction of a municipality (whether known as a 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; or
(b) in any area within the distance, measured aerially,
(I) not being more than two kilometres, 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 kilometres, 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 kilometres, 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.