• Capital Gains

I bought an acre of agricultural land in the outskirts of Delhi, had been doing farming in that and sold it after six years.I had a Capital again of 2.2 of which I again bought agricultural land in a rural village of Haryana which is 15 KM from the nearest town. 
Now after two years of this purchase I want to sell this land and use the money for my husband’s cancer treatment. 

Can I do so and will I attract Capital Gains and pay tax on that ?
Thanks.
Asked 6 years ago in Taxation

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13 Answers

Agriculture land in rural area is not asset no capital gain shall be applicable on same. 

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

No upto three years If you invest the same then no capital gain tax

Prashant Nayak
Advocate, Mumbai
34514 Answers
249 Consultations

the entire tax exemption will be reversed if the new property is sold within three years of purchase 

 

Ajay Sethi
Advocate, Mumbai
99775 Answers
8145 Consultations

If you sell a property within 36 months of buying it, the profit is added to your income for that year, and taxed as per your income tax slab rate. 

Mohammed Mujeeb
Advocate, Hyderabad
19325 Answers
32 Consultations

You have to pay capital tax as per ready recknor Index calculator, so need to know date of purchase and price and selling date and price. So will be able to provide you exact captain gain tax or straight forward you can reinvest in real estate or in bonds.

Ganesh Kadam
Advocate, Pune
13008 Answers
267 Consultations

spending the capital gains in the treatment of your husband will not give you the benefit of exemption from levy of capital gains tax

the capital gains are required to be invested only in specified assets as mentioned in the relevant section of the IT Act

however the money that you may have to spend for your husband's treatment can be claimed as a deduction from either your income or his income

Yusuf Rampurawala
Advocate, Mumbai
7899 Answers
79 Consultations

Yes there won't be any capital gain.

See there is no tax liability on sale of agricultural land you don't neet to transfer and then sell.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

However, agricultural land in a rural area in India is not considered a Capital Asset. So, no capital gains are applicable on its sale. 

 

2)once gift deed is executed duly stamped and registered she would be absolute owner of property she can sell the property 

Ajay Sethi
Advocate, Mumbai
99775 Answers
8145 Consultations

Dear Clietn,

An asset held for a period of 36 months or less is a short-term capital asset. No exemption.

Agricultural land in rural India dose not comes under the category of capital asset:

 

Yogendra Singh Rajawat
Advocate, Jaipur
23079 Answers
31 Consultations

You need to pay taxes whatever is applicable to you. Even if you transfer that to daughter she has to pay applicable taxes as per her income returns

Prashant Nayak
Advocate, Mumbai
34514 Answers
249 Consultations

Generally, agricultural land is not considered a capital asset and, therefore, its sale does not attract capital gains tax.

Agricultural land in Rural Area in India is not considered a capital asset. Therefore any gains from its sale are not taxable under the head Capital Gains. 

Since your lad was situated 15 kms away from town, it can be classified as rural area hence there is no capital gains on it and you are exempted from it.

you can proceed. 

T Kalaiselvan
Advocate, Vellore
89977 Answers
2492 Consultations

Agricultural land in Rural Area in India is not considered a capital asset. Therefore any gains from its sale are not taxable under the head Capital Gains. 


Conditions you need to meet Under Section 54B for claiming exemption from Capital Gains

  • The exemption is available to an Individual or a HUF.
  • The land which is being sold must have been used for agricultural purposes by the individual or his parents or by the HUF for a period of 2 years immediately before the date of transfer.
  • Another land for the agricultural purpose should be purchased within a period of 2 years from the date of transfer of this land.
  • The new agricultural land which is purchased to claim capital gains exemption should not be sold within a period of 3 years from the date of its purchase.

 


Agricultural land in Rural Area in India is not considered a capital asset. Therefore any gains from its sale are not taxable under the head Capital Gains. 


Conditions you need to meet Under Section 54B for claiming exemption from Capital Gains

  • The exemption is available to an Individual or a HUF.
  • The land which is being sold must have been used for agricultural purposes by the individual or his parents or by the HUF for a period of 2 years immediately before the date of transfer.
  • Another land for the agricultural purpose should be purchased within a period of 2 years from the date of transfer of this land.
  • The new agricultural land which is purchased to claim capital gains exemption should not be sold within a period of 3 years from the date of its purchase.

 

T Kalaiselvan
Advocate, Vellore
89977 Answers
2492 Consultations

Dear madam

The agriculture land in rural area doesn't come under the assets of a person and its sale will not attract any kind of capital gain tax. So you can sell the land and use the consideration for treatment of your husband.

Mohit Kapoor
Advocate, Rohtak
10686 Answers
7 Consultations

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