Taxation on selling non-agricultural rural land

1. Is it taxable ?

Ans. Yes

2. Please provide little brief information on this taxation ?

Ans. If the period of holding is more than 36 months it is LTCG and some benefits are accrued on account of it and taxed at 20%, however if the land is held for a lesser period it is STCG and taxable at the rate in the slab between 10-30% based on your other sources of Income

3. If it is taxable, how much amount of tax needs to be paid ?

Ans. In absence of details as to when it was acquired and the cost thereof for acquistion and improvement and the sale consideration it is difficult to answer.

4. Any book/website is available to go through detailed rules and regulations on the above topic ?

Ans. you can surf etaxindia, simpletaxindia, incometax department site for more details.

1. Is it taxable ?

Ans. Yes

2. Please provide little brief information on this taxation ?

Ans. If the period of holding is more than 36 months it is LTCG and some benefits are accrued on account of it and taxed at 20%, however if the land is held for a lesser period it is STCG and taxable at the rate in the slab between 10-30% based on your other sources of Income. Apart from the above treatment there are other options also.

3. If it is taxable, how much amount of tax needs to be paid ?

Ans. In absence of details as to when it was acquired and the cost thereof for acquistion and improvement and the sale consideration it is difficult to answer.

4. Any book/website is available to go through detailed rules and regulations on the above topic ?

Ans. you can surf etaxindia, simpletaxindia, incometax department site for more details.

Thanks for quick reply Vishal. I hope you have time to answer few more questions.

We had 3.2 acres of agricultural land for more than 20 years. We got it converted it into non-agricultural land a month back. It was sold for 90 lakhs a week back. We didnt knew that taxation will be there on the amount obtained after selling the converted land.

1. Now with above details, will this come under LTCG or STCG ?

2. You mentioned the period of holding. This is repect to land or the amount ?

3. If its uner LTCG, what benifits we can obtain ?

The moment the land was converted into NA land it has lost its exemption under tax statutes.

1. Now with above details, will this come under LTCG or STCG ?

Ans.The sale is a long term gain.

2. You mentioned the period of holding. This is repect to land or the amount ?

Ans.Period of holding wrt land

3. If its uner LTCG, what benifits we can obtain ?

Ans. You can purchase a house or invest in REC/NHAI bonds, however there is a limit on time for reinvesting in the modes prescribed under law.

Thanks again.

1. Is the land still a capital asset or its nature has changed on conversion ?

It is still a capital asset

I Agree with with the opinion of Shri A V Vishal Advocate.