Sale og agricultural land

This query is : Resolved

Kirti Ram Dabral (Querist)
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29 July 2015 A farmer has sold his agricultural land of Rs. 30,00,000/- which is received in bank saving account from party in the financial year 2011-12. Recently farmer has got a letter from Income Tax Dept. It was mentioned there in letter that transactions above Rs. 10,00,000/- has been done in the FY as mentioned above which is noticed through AIR information by department. Now the Department is asking for relevant details for the transaction. As seller party is farmer, he has never filed ITR. Is he liable for payment of tax? or what are other obligations for this case he may face while scrutiny?

CA D.C. Bansal

CA D.C. Bansal (Expert)
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29 July 2015 Dear Kriti, Agriculture Land is not a capital asset hence there will be no capital gain on sale of the land. Hence it is exempted from the tax. Please reply accordingly.

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CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)
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29 July 2015 As he is having only agricultural income and has sold only agricultural land he is not liable to pay tax. However the bank deposits will have to be explained in response to notice by furnishing documentary evidence of sale of agricultural land such as sale deed etc. and copy of bank account. A copy of jamabandi of agricultural land sold may also be furnished if the farmer has a copy of it so as to establish the ownership of agri. land.

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Kirti Ram Dabral

Kirti Ram Dabral (Querist)
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29 July 2015 Thanks CA DC Bansal Sir,
So,we will have to present copy of bank accounts and copy of land registry before ITO? or what other documents we can present?

CA D.C. Bansal

CA D.C. Bansal (Expert)
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30 July 2015 You just have to give a reply stating the fact that the deposit is made out of consideration of Agriculture Land sold. I think there should also be some provision for replying from your online login account.