Sale of converted non agricultural land
This query is : Resolved
07 January 2013
i have purchased an agricultural land in 2007 for 9 lacs and converted into non agricultural land in 2008.
now i am selling it for 10 cr.
how will be capital gain calculated
now i am selling it for 10 cr.
how will be capital gain calculated
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
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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