NARASIMHA (retired) 13 May 2015

Sale of agrl.land in rural area

I had a 0.20 cents of agrl.land inherited from my father 30 years back. No I want to sell the land. Now its cost is about 20 lakhs. If I sold the land for 20 lakhs, am I have to pay income tax on the amount,or is there any exemption

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bsrao 13 May 2015

The capital gains works out like this. The original cost shown for the property - Rs. x (bought in the year a). The sale price of the property - Rs. y (sold in year b). Then find the capital gains index (IT) for year a and year b. Then net Capital Gain amount is [y - (x* index for b/ index for a)]. This is the amount you have to pay capital gains tax on. If b-a is greater or equal to 3 then the long term rate applies, otherwise short term rate.

ADV-JEEVAN PATIL, MUMBAI ( DEEMED/CONVEYANCE OF BUILDING) 13 May 2015

1)To sell land u have to have minimum permissible land.2) If u sell capital gain tax has to be paid if do not invest in other land or property.

Mahesh V.P. (Advocate) 29 May 2015

If the land is used for agricultural purpouse, and is within the meaning of Section 2(14)(iii) of Income Tax Act, 1961. You need not worry as it will not be treated as "Capital Asset" and exempt from Capital Gains.