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Capital gain tax on sale of Agriculture land

Rahul Kondawar (13 Points)

25 February 2019

what will be capital gain tax of Sale on agricultural land in rural area?
Can it be exempted from tax?
Pls guide.

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9 Replies

CA Varun Khasia (CA) (198 Points)
Replied 25 February 2019

Sale of agriculture land is exempted from capital gain tax

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Rahul Kondawar (13 Points)
Replied 25 February 2019

Thanks ...Is profit on sale of agricultural land required to reinvest in new agricultural land to save capital gain tax?

CA Varun Khasia (CA) (198 Points)
Replied 25 February 2019

No, It is not regarded as capital asset in Income Tax Act so, you don't need to invest profits in any land or property.

Priya Kashyap (Student) (7053 Points)
Replied 25 February 2019

Rural agricultural land is not a capital asset and therefore gain arising from it will not be taxed.
I/s 10(37)
however this exemption is only available to Individual/HUF

Moneesh Nair (0) (609 Points)
Replied 25 February 2019

rural agricultural land is not a capital asset as per 2(14) of income tax act hence not taxable

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Priya Kashyap (Student) (7053 Points)
Replied 25 February 2019

@ Moneesh the clause (14) of section 2 is from the Finance Act with effect from 01/04/1970 .

RAMAKRISHNAN R (INCOME TAX OFFICER) (1736 Points)
Replied 25 February 2019

if it's rural agricultural land, then it's not capital asset and capital gains arises. but if it's urban agricultural land, then capital gain tax is to be paid and to avoid capital gains tax, either invest in agricultural land or residential property to avail deduction under 54B and 54F respectively