Agriculture land

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 February 2013 My client purchased a agriculture Land of 0.90 hactare and did the ploting and sold part of it in small plots to various buyers without converting it in NA Plot. Can we treat this transaction as purchase and sale of agriculture land hence tax free transaction as agriculture land is not a capital asset under section 2(14) of IT Act.

CA.Sourabh Sethia

CA.Sourabh Sethia (Expert)
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22 February 2013 Agriculture Land is a Capital asset if the same comes in the definition as per the provision
i.e.
if the Land is situated—

(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 according to the last preceding census of which the relevant figures have been published before the first day of the previous year ; or

(b) in any area within such distance, not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (a), as the Central Government may, having regard to the extent of, and scope for, urbanisation of that area and other relevant considerations, specify in this behalf by notification in the Official Gazette

Querist : Anonymous

Querist : Anonymous (Querist)

22 February 2013 If it does not situated in above area then? please guide on the tax treatment of income?

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CA.Sourabh Sethia

CA.Sourabh Sethia (Expert)
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23 February 2013 Then the same is not a capital asset and the same is not chargeable to Capital Gains