rajneesh madhok
SPNer
- Jan 1, 2010
- 517
- 490
- 60
To avoid tax troubles, Precautions in documentation of sale of agricultural land be taken
The agricultural land income is tax free as long as it is more than 8 kms away from the municipal limits. If the land is with the 8 kms range of a municipality limits, then you has no other go except paying capital gains.
Regarding showing under value:- Already all the properties are under valued with the Govt. Income Tax people accepts the Govt. registration value as your sale amount. If you show less than Govt. value, it is of no use. For the purpose of Income Tax calculation, the govt. registration value will be taken as your sale value if the sale consideration is less than Govt. value.
So, keep in consideration that Not all agricultrural land is Tax Free. Only Rural agricultural land is tax free.
According to Section 2(14)(iii): Agricultural land in India, not being land situated (a) in <link rel="File-List" href="file:///C:/DOCUME%7E1/ADMINI%7E1/LOCALS%7E1/Temp/msoclip1/01/clip_filelist.xml"><!--[if gte mso 9]><xml> <w:WordDocument> <w:View>Normal</w:View> <w:Zoom>0</w:Zoom> <w
oNotOptimizeForBrowser/> </w:WordDocument> </xml><![endif]--><style> <!-- /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-parent:""; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:"Times New Roman"; mso-fareast-font-family:"Times New Roman";} p {margin-right:0in; mso-margin-top-alt:auto; mso-margin-bottom-alt:auto; margin-left:0in; mso-pagination:widow-orphan; font-size:12.0pt; font-family:"Times New Roman"; mso-fareast-font-family:"Times New Roman";} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} --> </style> (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the last preceding census of which the relevant figures have been published before the first day of the previous year; or(b) in any area within such distance, not being more than eight kilometres, from the local limits of any municipality or cantonment board .....
However, in case you do not fulfill the aforesaid conditions, the sale of such land shall result in long term capital gains on which you will have to pay tax . But there are exemption provided u/s section 54B ,54F and 54 EC which can be availed by you for reducing the tax or even exempting from payment of tax.
So, precautions of documentations kindly be taken before getting registration of agricultural land.
Rajneesh Madhok
The agricultural land income is tax free as long as it is more than 8 kms away from the municipal limits. If the land is with the 8 kms range of a municipality limits, then you has no other go except paying capital gains.
Regarding showing under value:- Already all the properties are under valued with the Govt. Income Tax people accepts the Govt. registration value as your sale amount. If you show less than Govt. value, it is of no use. For the purpose of Income Tax calculation, the govt. registration value will be taken as your sale value if the sale consideration is less than Govt. value.
So, keep in consideration that Not all agricultrural land is Tax Free. Only Rural agricultural land is tax free.
According to Section 2(14)(iii): Agricultural land in India, not being land situated (a) in <link rel="File-List" href="file:///C:/DOCUME%7E1/ADMINI%7E1/LOCALS%7E1/Temp/msoclip1/01/clip_filelist.xml"><!--[if gte mso 9]><xml> <w:WordDocument> <w:View>Normal</w:View> <w:Zoom>0</w:Zoom> <w
oNotOptimizeForBrowser/> </w:WordDocument> </xml><![endif]--><style> <!-- /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-parent:""; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:"Times New Roman"; mso-fareast-font-family:"Times New Roman";} p {margin-right:0in; mso-margin-top-alt:auto; mso-margin-bottom-alt:auto; margin-left:0in; mso-pagination:widow-orphan; font-size:12.0pt; font-family:"Times New Roman"; mso-fareast-font-family:"Times New Roman";} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} --> </style> (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the last preceding census of which the relevant figures have been published before the first day of the previous year; or(b) in any area within such distance, not being more than eight kilometres, from the local limits of any municipality or cantonment board .....However, in case you do not fulfill the aforesaid conditions, the sale of such land shall result in long term capital gains on which you will have to pay tax . But there are exemption provided u/s section 54B ,54F and 54 EC which can be availed by you for reducing the tax or even exempting from payment of tax.
So, precautions of documentations kindly be taken before getting registration of agricultural land.
Rajneesh Madhok
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