08 January 2013
Agricultural Land is not a Capital Asset only if it meets the relevant criteria specified in the definition of "capital asset" u/s 2(14) Assuming that this criteria is met, you can take the cost of acquistion of the agricultural land and index it all expenses incurred by you to make the agrifcultural land NA, will be considered as cost of improvement. this can also be indexed. Lastly, expenses on transfer of the land can also be deducted. The amount by which the sale consideration exceeds the above three cost components will be capital gain
25 July 2013
Since you have converted the Agriculture land to NA it is to be treated as general land and all Capital gains shall be charged to income Tax as per the provisions of section 45 to 54 but you will be able to claim the benefit of indexation on the purchase price
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