07 April 2017
A PERSON HAS PURCHASED AGRICULTURAL LAND 10 YEARS AGO . HE HAS NEITHER SHOWN THE PURCHASE OF AGRICULTURAL LAND NOR REPORTED THE AGRICULTURAL INCOME IN HIS RETURN OF INCOME . IF HE SELLS THE AGRICULTURAL LAND NOW ; WHETHER THE GAINS ARE EXEMPTED OR TAXABLE .
Practically speaking, in this situation simply, we need to analyze the land as per the definition of Capital Asset. If that land is an urban agricultural land only then we need to compute the capital gains and deposit the tax but if that land falls under the category of rural agricultural land then there is no question of capital gains even though the assessee not shown any agriculture income in its previous returns.
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