Rural gricultural Land - Income on Sale

[subodh]

Respected Experts,
Rural Agricultural Land is not a Capital Asset, hence capital gains are not applicable on its sale.
Then under which head such income is taxable?
- If it falls under "Income from Other Sources"?
- or is it not taxable?
If the provisions of Sec. 43CA are applicable on sale of Rural Agricultural Land ?
Please enlighten me.

[pawansingla]

If not within 8 kms from municpal area,it is not taxable at all.43CA not applicable

[subodh]

Dear Singla Sir, 1. I would be thankful if you could please suggest WITH CITATIONS as to how that income from sale of agricultural land beyond certain municipal limits is not taxable at all.
2. Sec 43CA reads "...transfer by an assessee of an asset (other than a capital asset), being land or building or both...". Kindly explain me this also that how is it not applicable?

[camanojgupta]

then such land will not be treated as a capital asset. If the agricultural land is not a capital asset, then its transfer will not result in capital gain. Further, the gain arising from transfer of such land will be treated as agricultural income.
For this proposition u may refer to Explanation 1 to section 2(1A) which provides that any revenue derived from transfer of agricul-tural land referred to in section 2(14)(iii)/(a)/(b) (Being land situated in urban area) shall not be treated as revenue derived from land being exempt under section 2(1A).
Therefore, if the agricultural land falls outside the scope of section 2(14)(iii)(a) or 2(14)(iii)(b), then the gain arising from its transfer can be treated as agricultural income because section 2(1A)(a) pro-vides that any rent or revenue derived from land which is used in India and is used for agricultural purposes is agricultural income.
The ITAT Cochin Bench has taken similar view in the case of ITO v. Dr. Koshy George 2009 317 ITR 116
Further section 43CA may apply to such cases on a technical interpretation of the matter.
CA Manoj Gupta
Jodhpur
09828510543

[barbar]

If not within 8 kms from municpal area,it is not taxable at all.43CA not applicable

I'm agree with you.