- Is 36 months holding rule that is applicable to residential property will be applied to agriland?
- The cost of purchase was 10 lacs and selling cost will be 40 lacs than how much capital gain i will have to pay if I sell this agriland?
- Can the income be exempted from capital gain tax?
The capital gains is charged on capital assets sale. So first thing to determine is “whether the agriculture land , you have referred is Capital Asset or not?”. Section 2(14) of the I t Act defines capital asset.The definition is as under:
(i) …….
(ii)
(iii) agricultural land in India, not being land situate
(a) in any area which is comprised within the jurisdiction of a municipality (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
Yes, 36 months period is for this land to be taken as long Term Capital Gains.
Compute the capital gains by taking indexation benefit on cost of land.
About taxworry
As per the answer, if land is situated beyond the 8 kms then it is NOT a capital asset. I am bothering you again, as I need to clarify the following things
1. What documents are required to prove that land is situated beyond 8 kms from the corporation limit for convincing IT officers?
2. I would like to know the tax to be paid for the gain of rs 30 lacs if I sell land before 36 months?
3. Tax liability for the same gain if I sell after 36 months of holding
4. How to reduce the SHORT term capital gain payment such as investing in bond
As per IT act the areas are given in a circular .It is actually the shortest distance which is taken form the municpality.
Secondly this is short term capital gain as per the act the short term capital gain is taxed as per normal income and taxed according to the slab.There is no separate exemption for short term capital gain
if the farm land is situated beyond 8 kms from the municipal limit, then the asset is not a capital asset. no capital gain will arise.
venkatasubramanian
in your case ur land is situated within 8 kms…so it is a capital asset taxable in ur hands…. if u sell it within 36 months…. it will lead to stcg(short term gains) and will be included in ur total income for the yr in which u sell
if u sell after 36 months…it will be ltcg and u can take the benefit of indexation…… if loss arises….good for u…… if not it will be taxable @ 30% whereas short term will be taxable @ 20%..
now regarding that8 kms question…. u must have the sale/purchase agreement of the land…. along with it must be a 7/12 extract or other relevant docs if it is urban land….. sumwhere in this document, there is always a mention with regards to the distance from the nearest municipal authorities….