prpri Capital gain on Transfer of agriculture land Capital gain on Transfer of agriculture land

Capital gain on transfer of agriculture land shall be chargeable to tax only if such agriculture land situated in an urban area.  The land will be considered as agricultural land in an urban area if it satisfies the following conditions :

♦ Any area which is in the jurisdiction of a municipality or cantonment board having a population ** of 10,000 or more.

                                           Or

♦ In any area within distance –

2km or less * from the local limit of municipality or cantonment board If the population ** is more than 10,000 but less than or equal to 1 lakh i.e ( 10,001-1,00,000)
6 km or less * from the local limit of municipality or cantonment board If the population **  more than 1 lakh but less than or equal to 10 lakh  i.e (1,00,001-10,00,000)
8 km or less* from the local limit of municipality or cantonment board If the population ** is more than 10 lakh

* measured aerially

** population according to census on the last day of preceding previous year

Illustration to 2nd condition

Village Area distance measured aerially from such municipality or cantonment board (km) Population according to census on the last day of preceding previous year Taxability on transfer of agriculture land
A 1 9,000 NOT TAXABLE
B 1 11,000 TAXABLE
C 2.5 11000 NOT TAXABLE
D 2.5 1,10,000 TAXABLE
E 6.5 9000 NOT TAXABLE
F 6.5 11000 NOT TAXABLE
G 6.5 110000 NOT TAXABLE
H 6.5 500000 NOT TAXABLE
 I 6.5 1100000 TAXABLE

Author Bio

Name: Ansh
Qualification: Student - CA/CS/CMA
Company: Ashwani singhal & co.
Location: Haryana, IN
Member Since: 02 Apr 2019 | Total Posts: 1

More Under Income Tax

8 Comments

  1. Eshaan says:

    Mr. A, aged 45 years sold an agricultural land for Z 52 lakhs on 04.10.2019 acquired at a
    cost of ¥ 49.25 lakhs on 13.09.2018 situated at 7 kms from the jurisdiction of municipality
    having population of 4,00,000 and also sold another agricultural land for
    £53 lakhs on 12.12.2019 acquired at a cost of 3 46 lakhs on 15.02.2018 situated at1.5
    kms from the jurisdiction of municipality having population of 12,000. What would be the amount of capital gain chargeable to tax in the hands of Mr. A for the assessment year
    2020-21? Cost inflation index for F.Y. 2017-18: 272; 2018-19: 280: 2019-20:289.
    (a)
    Short-term capital gain of ¥ 9.75 lakhs
    b)
    Short-term capital gain of Z 7 lakhs Long-term capital gain of. 4,12,500
    d)
    Long-term capital gain of ¥ 5,29,196
    Please help me to find the answe

  2. vijay says:

    All tax systems are based on a designated authority that determines whether the article is taxable. in this case taxability determined by aerial distance. any designated authority as per statute, that measures the distance, given that the location of land could be in different districts/states ?

  3. santosh kumar acharya says:

    sir
    I would like to know weather income tax is applicable in relation to selling of two revenue land in replace purchasing of one land in first selling and make construction for second one. plz. clarify .

  4. Pradip upadhyay says:

    I had purchased agriculture land of 13 hector in Lavad village 13 km. far from Dehgam municipality of gandhinagar dist. Dehgam has 42000 population. Land was purchased in july 2010 and sold within 1 year.capital gain tax was charged. Was this tax chargable ?

  5. Dhruv says:

    I want to know if the land is situated at 1 km distance and the population is 1,01,000. Then whether it would be taxable?

    If going by your above definition, the limit for land situated within 2 kms is 10,001 – 1,00,000. So if in above situation, if the population is 1,01,000 for 1 km distance land, then it will be considered as NOT TAXABLE.

  6. Dhruv says:

    I want to understand the following for the distance of 2km or less.
    You have mentioned,
    “If the population ** is more than 10,000 but less than or equal to 1 lakh i.e ( 10,001-1,00,000)”

    If the population is below 1,00,000, then anyhow it is non taxable. Then why there is a need to mention from 10,001 – 1,00,000? If it is below 10,000, then also it is non-taxable. So the limit should be 0 – 1,00,000 not 10,001 – 1,00,000.

    Please help me to understand

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