I have sold a In heritage Agriculture Land on 2012 of Rs. 22 lacs. on the sale of land Agriculture Land comes under urban land. the same land was bought by my father in 1965.
now my query is whether I m liable to pay income Tax ? If yes, than how much and what is the procedures ?
16 August 2013
Yes, you required to pay Income tax(capital gain tax). For computation of capital gain tax we required the following:
1) Purchase value in the hands of your father 2) Market value as on 1-4-1981 3) Date of transfer of property in your name(gift given date) and market value as on that date 4) Date of sale and amount of sale and any expenses at the time of sale
16 August 2013
1. Gain arising on such sale is taxable as capital gain.
2. Since the asset is a long term capital asset, Long Term Capital Gain will arise.
3. For computing capital gain Rs. 22 lakhs shall be the sale consideration. Further you will have to compute the indexed cost of acquisition of the land. Take the fair market value on 1.4.1981 and index it. This indexed cost shall be reduced from the sale consideration and the resultant figure shall be LTCG.
4. Such LTCG is taxable at a flat rate of 20%.
5. You can save tax on LTCG by investing in a residential house property.
16 August 2013
You can also save Capital gain by investing on AG LAND. (you have mentioned that it is ag land and i assume that you were doing agriculture for last two year)