15 October 2012
1)I have one ancesstral agriculture land in the name of my father, now we want to sale this agriculture land, i want to know that after sale of this property it may attact inocome tax or not ?
2) If the sale proceed of this agri.land I will invest in bank as a FD for 5 years. I want to know that it's interest is taxable or not?
15 October 2012
1) If such agricultural land is situated in the prescribed limit by the Income tax department. I.e situated in a village/town/city having population more than 10000 and such place of situated of land is with in 8 Kms from the any municipal or any corporation limits then liable for Long term or short term capital gain tax based on the holding period of land from the actual buyer to till the sale of land. Otherwsie i.e if such agricultural land not situated in the specified limits above then no tax liability.
2) yes, Sales amount deposited in FD interest is taxable.
15 October 2012
1. Agriculture Land: agriculture land in rural area is not covered in definition of Capital asset hence no capital gain is applicable in case of sale of agriculture land in rural area .However capital gain tax is applicable if land is situated in urban area.
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