2024 Income Tax Rules: Often people lack information about the rules and laws related to land. In this context, let us tell you that if the land does not fall in any of the above mentioned ranges, then it will be considered as agricultural land and no capital gains tax rule will be applicable on its sale.
In India, capital gains tax is levied on the sale of flat, house, shop and industrial land. But how much and how is the tax levied on the sale of agricultural land? Very few people are aware of the rules regarding this.
Is agricultural land subject to tax?
- According to section 2(14), agricultural land is not considered a capital asset unless it is agricultural land. Unless she fulfills the conditions given below.
- If the land falls within the limits of the Municipality or Cantt Board and the population is more than 10,000.
- The land falls within two kilometers of the limits of a municipality or cantonment board with a population of more than 10,000 or less than 1,00,000.
- The land falls within six kilometers of the limits of a municipality or cantonment with a population of more than 100,000 or less than 10,00,000.
- The land falls within eight kilometers of the limits of any municipality/cantonment board with population more than 10,00,000.
At the same time, if the land does not fall in any of the above mentioned ranges, then it will be considered as agricultural land and no capital gains tax rule will be applicable on its sale. There is no profit/loss of any kind on the sale of this type of agricultural land. It will not come under the purview of income tax.
If land falls in any of the above categories, it will be considered a capital asset and will attract capital gains tax. If more than 24 months have passed since the land was purchased, then long term capital gains tax will be applicable. Otherwise short term capital gains tax will have to be deposited.
Is tax levied on transfer of money from sale of land to children?
If a person transfers money to his children or wife after selling land, then the transferred money will not come under the ambit of tax. But important documents of land sale should be kept safely. Along with this, before selling any land, its valuation should also be done with the help of an expert.
