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Head for taxation

Vikrant Singh (7 Points)

01 April 2018

income from sale of agricultural land sold for non-agricultural purpose is assessable under which head????

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3 Replies

Dhruv Pancholi (Ca) (137 Points)
Replied 02 April 2018

It will be u r taxable income under capital gain u/s 45 of IT act ,1961

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stutiritutiwari@gmail.com (2 Points)
Replied 02 April 2018

i have a query

Saifullah Khalid (Autodidact/Curious ) (633 Points)
Replied 02 April 2018

Originally posted by : Vikrant Singh
	income from sale of agricultural land sold for non-agricultural purpose is assessable under which head????

Generally "Agricultural land situated in Rural Area " is not considered a "Capital asset " as per the IT act provisions so no Capital gains issue/applicability on such Land BUT few points are to be taken into considered before this :

* Land Should fall under the under the definition of " Agricultural Land in Rural Area (**criteria for same is given at the end of this post)"
* Before sale the status of the land should not have changed/converted (by any means..like sale deed or any other document) to non Agricultural land.

" Agricultural land in Urban area " is treated as a capital asset as per the IT act so Capital gains and tax on same will be there in such cases excemptions (exemptions as per sec. 54 applicable).

** Agricultural Land in Rural Area : --

* Where the agricultural land situated in an area within the jurisdiction of the municipality or where the population is less than ten thousand.

* Where distance of the agricultural land from municipality and population limit is as under:
(1) Distance from municipality > Under 2 kilometres AND Population > 10,000 to 1,00,000.
(2) Distance from municipality > 2 km to 6 km AND Population > 1,00,000 to 10,00,000.
(3) Distance from municipality > 6 km to 8 km AND Population > Above 10 lakhs.