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Tax liability on Sale of Plot which was received as compensation of agriculture Land acquision?

24 July 2023

Dear Professional collegues,
Please give your valuable views over Tax liability on Sale of Plot which was received as compensation of agriculture Land acquision?

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2 Replies

jagdish chhugani (engineer) (755 Points)
Replied 27 July 2023

Under Section 10 (37) of the Income Tax Act, Capital Gains on compensation received on compulsory acquisition of urban agricultural land is exempt from tax.

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jagdish chhugani (engineer) (755 Points)
Replied 27 July 2023

Capital Gains Tax on Sale of Agricultural Land in Rural Area

As per the Income Tax Act, the Rural Agricultural Land has been exclusively excluded from the definition of Capital Asset. Rural Agricultural Land is not a Capital Asset; hence the Income Tax as Capital Gain Tax on the sale of such rural agricultural land won’t be levied, irrespective of the amount involved in the transaction, no capital gain would be levied on the sale of rural agricultural land.