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Profit on sale of agriculture land treatment

CA Srikanth Reddy (CHARTERED ACCOUNTANT) (44 Points)

06 October 2018

Profit on sale of agriculture land is not taxable under which section?

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Rakesh Joshi (CA Final) (1272 Points)
Replied 06 October 2018

According to Section 47 (viii) any transfer of agricultural land in India effected before 1st Day of March 1970 shall no be regarded as transfer.

But the transfer took place after that will be trated as tranfer u/s 2(47) and any transfer of a capital asset shall be chargeable to tax under the head Capital gains.

However if the capital asset so transferred is a long term capital asset then you can avail exemption u/s 54B of the Act by making investment according to the provision of the section.

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Saifullah Khalid (Autodidact/Curious ) (633 Points)
Replied 08 October 2018

Originally posted by : Rakesh Joshi
	According to Section 47 (viii) any transfer of agricultural land in India effected before 1st Day of March 1970 shall no be regarded as transfer.But the transfer took place after that will be trated as tranfer u/s 2(47) and any transfer of a capital asset shall be chargeable to tax under the head Capital gains.However if the capital asset so transferred is a long term capital asset then you can avail exemption u/s 54B of the Act by making investment according to the provision of the section.

NO , Agricultural land in rural area is NOT A CAPITAL ASSET so no question of Capital gains ....

Rakesh Joshi (CA Final) (1272 Points)
Replied 08 October 2018

@ Saifillah Khalid I partially agree with you. But please read Section 2(14) fully.

As per Section 2(14)(iii) Capital asset capital assets does not include agricultural land sitated in India except........... condtions are there. So there is a possibility that Agricultural land can be a capital asset as well.