This is a very good question about the sale of agricultural land taxability. Well, since we cannot build any property on agricultural land, it is very hard to make any profit out of it. Whatever money you get by selling agricultural land is very less and after that, if you have to pay taxes, you will end up making very less money. So, it is better to learn 'Is selling of agricultural land taxable?'. It will help you make the correct decision in case you want to sell your agricultural property.
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Well, the first thing you should know is that if your agricultural land is located in a Rural area then you cannot consider it a capital asset. Therefore you don't need to worry about gains from its sale, since your property is not taxable under head Capital Gains.
But if you are selling agricultural land where you hold it as stock in trade, you need to pay tax. So, let us learn how to claim tax exemption for agricultural land.
Under Section 54B you can claim exemption from capital gains if you are selling agricultural land. The following points need to be considered to claim tax deduction.
You can claim tax exemption if you belong to Hindu Undivided Family (HUF).
Before transferring, the land must be used for agricultural purposes and there should be evidence supporting this.
Another land should be purchased within two years of selling the land.
The agricultural land bought should not be sold within 3 years from the date of purchase.
You can deposit the capital gains before the filing of return in the deposit accounts. You can claim the exemption for the amount that you have deposited.
Other points to remember when you are selling agricultural land:
If the price of the agricultural land is more than the capital gains, you can claim for tax reduction.
I hope you understand the points I have explained about sale of agricultural land taxability.
Read more:
What Is Tax Exempt? Is Standard Deduction Applicable In New Tax Regime?How To Convert Agricultural Land To Residential Land?
How To Convert Agricultural Land Into Commercial Land?
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Authors Of The Question
Is Selling of Agricultural Land Taxable?
Chaitanya
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2022-05-17T10:21:11+00:00 2023-11-09T21:34:26+00:00Comment
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