| Question And Answer | |
|---|---|
| Subject: | Sale of ancestral agricultural land after converting in to NA , how to compute the capital gains ? |
| Category: | Income-Tax |
| Querist: | ca vinay v. kawdia |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | Agricultural land, Capital Gains, cost of acquisition |
| Date: | May 19, 2021 |
Assessee sold ancestral agricultural land after converting it to NA in 20-21. Agricultural Land was converted to NA plots in 2016-17. All the plots were sold in one go. For the purpose of calculation of capital gain, while taking cost of acquisition as on 01.04.2001 as per S. 55(2)(b)(i), which SDV is to be taken – applicable to agri. land or NA land as on 01.04.2001? Is it possible to take cost of acquisition as on date when the land was converted to NA?
Section 55 and the head of capital gains refers to the transfer of a capital asset. An agricultural land is not a capital asset under the scheme of Income-tax Act, 1961.
Therefore, FMV of NA on the date of conversion may be taken into consideration, also the period of holding will be considered from the date of conversion. It may be desirable to get the valuation report from the Authorized Valuer .
What if the Land in question was Rural Land and converted into NA Land 4 years back and the said NA land was sold in Jul 2021?
It will be same as stated above…
As it is converted four years ago means in 2017-18, FMV on date of conversion will be taken and for period of holding also -from date of conversion to date of sale…
As it is held for more than 36 months it will taxable as LTCG u/s112
What if the land was converted by the government and not by individual