Dear Members of the Forum
I am writing to seek advice from experts on this forum on exemption from capital gains on sale of agriculture land. I am in the process of selling my agriculture land which is located in a very remote rural area and is classified as agriculture land. The property meets the description of the Income Tax authorities as a rural agri land as per population, distance from town / municipality, etc. I have part teak and gooseberry plantation and I also cultivate field crops like blackgram in this land. All cultivation of teak, gooseberry and blackgram is under 20% of the total land and the remaining 80% of the agri land is vacant agri land only. I have also filed Income Tax returns disclosing agriculture income. I have the following queries
- What is the definition of agri land from an cultivation perspective for me to gain exemption from capital gains to avoid paying capital gains taxes or avoid re-investment in another agri land
- Will sale of agri land with commercial tree crops be exempted from capital gains
- Will tree crops like teak and gooseberry be counted as agri crop or treated as commercial tree crops
- Since I am currently involved in cultivation in only 20% of the total extent of land, will I get exemption from capital gains in case of sale for the entire 100% of the land or for only 20% of the utilised land
1 Answers
Dear Krishnan,
Based on the information provided by you, income derived from your land can be treated as an Agricultural income.
Kindly go through below points ;
Land cultivation is must:- Some measure of cultivation is necessary for land to have been used for agricultural purposes. The ambit of agriculture covers all land produce like grain, fruits, tea, coffee, spices, commercial crops, plantations, groves, and grasslands. However, the breeding of livestock, aqua culture, dairy farming, and poultry farming on agricultural land cannot be construed as agricultural operations.
Suggest you to kindly consult a CA in this regard. Related article : Agricultural Income & Sale of Agricultural land : Tax Treatment, Computation & Implications
Suggest you to kindly consult a CA in this regard. Related article : Agricultural Income & Sale of Agricultural land : Tax Treatment, Computation & Implications
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