Jay Bodha (Employed) (139 Points)
05 May 2011Hi,
Please let me know the tax implication of the following transaction:
Mr A sold his Agriculture land which is not a capital asset as per definition u/s 2(14) of the Income tax Act.
Now as per normal interpretations this will not be charged to capital gain.
but can it be taxed under any head or these receipts are fully exempt
Awaiting an early reply.
U S Sharma
(glidor@gmail.com)
(21056 Points)
Replied 05 May 2011
if the agricultural is not covered by urban land then NO TAX on sale proceeds received.
1]before going to the defination of 2 (14) u should know the what are the conditions;
1) there should be a Capital Assets
2) there should be transfer of such capital asset
above both the conditions must be fulfilled.
2] Sec 54 B Exemption for agriculture land:
LTCG\STCG on transfer of Urban agriculture land (used for agriculture purpose for at least 2 yrs. either by himself or his parents) shall be exempt if the amt. of capital gain is utilied for purchase of another agriculture land in rural.
3] if agriculture land in rural area then its not a capital asset that mean NO CAPITAL GAIN.
Sathya Sankeerth K N
(Chartered Accountant)
(429 Points)
Replied 05 May 2011
Profits arising on transfer of rural agricultural land amounts to agricultural income under section 2(1A). Such income cannot be included in the total income under section 10(1).
THIS FOR YOUR KIND INFORMATION RURAL AGRICULTURAL LAND IN INDIA IS NOT A CAPITAL ASSET AS PER SEC 2 (14) OF THE IT ACT.
CA.Naveen Kailkhuri
(CA)
(38 Points)
Replied 05 May 2011
@ Jay..
As you have already mentioned that the Agricultural Land is not a capital asset u/s 2(14), then there do not arise any question of capital gain on such transfer.
However, if Mr. A, is doing business of property/real estate, then there will arise a Business Income rather than the Capital Gains.
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
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