| Question And Answer | |
|---|---|
| Subject: | Sale of land used for agricultural by members and investment – Exemption of capital gains . |
| Category: | Income-Tax |
| Querist: | S PRAKASH |
| Answered by: | Research Team |
| Tags: | Agricultural Income, Agricultural land, Capital Gains, Sale of Agricultural land |
| Date: | June 29, 2021 |
sir,
just before the sale of the land used for the agricultural activity has been converted as non-agricultural land and the proceeds have been received by one single person on behalf of the number of members in the family which he again returned to the members of the family to facilitate the easy transaction. Whether this can be treated as agricultural income in the hands of individual members? or it has to be treated as capital gains, if so long or short. In case if the investment is made to claim the exemption, can it be allowed? The members became the owners jointly due to the death of the father.
One has to verify where the land is situated and whether agricultural activities were carried on regularly , who has converted the land as non -agricultural , whether seller or buyer and whether for business purposes of holding as investment . If the land is held as investment, the sale will be long term capital gains and the assessee will get the benefit of indexation . Though the consideration is received by one single member all members will be joint owners and each will be taxed separately . The investment made by the each member will be entitle to exemption , subject to other conditions are satisfied. It may be desirable to consult the tax consultant who can advice properly after studying the agreement and other details .
SIR,
THANK YOU VERY MUCH