I am selling my agricultural land and the buyer will convert it to non-agriculture land and sell plots. The buyer has proposed to pay some advance and balance within 24 months, in the meanwhile he wants to start developing (i.e., get all approvals for plots and enter in to “agreement to sell” with plot buyers). The village population is less than 10,000 but the land may fall within 8 KMs of the municipal limit (Need to confirm).
I see 2-3 scenarios and need guidance on how to structure this agreement in a safe & tax efficient manner in each of these scenarios.
1. If the land is outside 8 Kms of municipal limit and I do a sale deed before converting to NA then I am assuming no capital gain tax is applicable.
2. Even if the land is outside 8 Kms of municipal limit BUT the buyer wants to convert the land to NA and then he asks me to directly make the sale to his customers for the plot, then is there a way for me to structure the deal to avoid taxes.
3. If the land is within 8 Kms of municipal limit and buyer wants to convert the land to NA and then he asks me to directly make the sale to his customers for the plot, then is there a way for me to structure the deal to avoid taxes.
