| Question And Answer | |
|---|---|
| Subject: | TAXABILITY ON SALE OF AGRICULTURE LAND |
| Category: | Income-Tax |
| Querist: | Karan shah |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | Agricultural land |
| Date: | August 27, 2022 |
Assessee had land in dholera. Dholera has population of 2500 peoples. There is no town within 20 kms from dholera (land of assessee) having a having population more than 10000.
The government has recently recognized dholera as residential zone and passed town planning.
Q – whether the land of assessee will be considered as agriculture land as population of dholera is less than 10000 and whether sale of said land will be taxable?
Q – Or whether due to the status of land being residential zone and under town planning, the sale of given land will be taxable
Q – Many income tax assessment order has been passed of assessee living in dholera making capital gain on sale of such land as taxable on the ground that – the area is now under town planning and residential zone. What ground can be taken against the given order?
There is a twin condition to be satisfied for a land to not be recognized as a capital asset i.e., 1. It has to be agricultural land. 2. It has to be situated in a rural area.
Now, As the conditions for not treating land as rural agricultural land under section 2(14)(iii) of the Income-tax Act are not fulfilled, the same will continue to be treated as rural agriculture land, which is not a capital asset and thereby no capital gains can be attracted on the transfer of the said land.