how to get idea whether land is rural or urban agriculture land in simple view for return filing? is it complusory to show gain from sale of rural agriculture land?? plz reply urgent
4 Replies
Y GOPI REDDY
(GREAT POLITICAL LEADER)
(378 Points)
Replied 21 November 2018
measure distance from municipal local limits
Nikhil Goyal
(Practicing CA )
(39 Points)
Replied 21 November 2018
Rural agri land gain is Exempted income. So show in exempted income collum.
SHAILY GUPTA
(TAX CONSULTANT)
(106 Points)
Replied 21 November 2018
is it complusory to show gain from sale of rural agriculture land in itr??
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Nitesh bind
(Student CA Final )
(12692 Points)
Replied 22 November 2018
See, you must understand the Concept of Agriculture land. It might be of Of 2 types:
Rural Agriculture Land; OR
Urban Agriculture Land
Rural agriculture land is NOT AN CAPITAL ASSETS therefore on sale of it there would be no question of Capital Gain. It would be totally exempt.
Urban Agriculture Land is taken as Capital Assets but if it is sold after 2 year and in this last 2 years it was being used for agriculture purpose then it would be Exempt u/s 10(37).
If any other case then capital gain from sale of Urban agriculture land would be taxable but Exemption u/s 54B would be allowed for that.
Therefore understanding Agriculture Land concept is important for computing taxes.
HOW TO RECOGNISE:
It is measured as per certain criteria given under Income tax act. That is if any land is situated under any such village which population is WITHIN 10,000 (i.e Upto 9,999) then such land would be rural agriculture land.
Also there are few other criteria under which it is measured from nearby Municipal board etc. (if you want to know about that reply here. can't explain becoz answer would stretch too much).
In Practical Aspect:
If land is situated anywhere in Village we did not bother Client to confirm his village population etc because it is not even possible. Therefore we just simply take any Village land as Rural Agriculture land and A.O(s) as well take these very Leniently. BUT BE CAUTIOUS IF AMOUNT INVOLVED IS REALLY BIG (e.g In crores).
Rural Agriculture Land; OR
Urban Agriculture Land
Rural agriculture land is NOT AN CAPITAL ASSETS therefore on sale of it there would be no question of Capital Gain. It would be totally exempt.
Urban Agriculture Land is taken as Capital Assets but if it is sold after 2 year and in this last 2 years it was being used for agriculture purpose then it would be Exempt u/s 10(37).
If any other case then capital gain from sale of Urban agriculture land would be taxable but Exemption u/s 54B would be allowed for that.
Therefore understanding Agriculture Land concept is important for computing taxes.
HOW TO RECOGNISE:
It is measured as per certain criteria given under Income tax act. That is if any land is situated under any such village which population is WITHIN 10,000 (i.e Upto 9,999) then such land would be rural agriculture land.
Also there are few other criteria under which it is measured from nearby Municipal board etc. (if you want to know about that reply here. can't explain becoz answer would stretch too much).
In Practical Aspect:
If land is situated anywhere in Village we did not bother Client to confirm his village population etc because it is not even possible. Therefore we just simply take any Village land as Rural Agriculture land and A.O(s) as well take these very Leniently. BUT BE CAUTIOUS IF AMOUNT INVOLVED IS REALLY BIG (e.g In crores).
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