Capital gain

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 June 2013 Agricultural land aquired in rs 10lacs without registration 4yrs back.now aquried assessee selling those assest in 20 lacs.what will be the tax conseqence and effective tax management advice.

Anand

Anand (Expert)
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06 June 2013 'Agricultural Land' is not considered to be a capital asset if it meets certain criteria in relation to distance from the local limits of a municipality/cantonment board and population of the said area. If t is not a capital asset, the entire gain will be not taxable.
If however, it does not suit the above criteria, then the Capital Gains after indexation will be taxable as Long Term Capital Gains and subjected to a tax rate of 20% plus surcharge and cess. This tax can be avoided by :
1. If land has been used for agricultual purposes you can invest within 2 years from date of sale in another land for agricultural purposes. That part of capital gain invested will be exempt u/s 54B
2. Withinn 6 months from date of transfer of land, the whole or part of capital gains is to be invested in bonds issued by RECL, NHAI.