Tax liabilities on sale of agriculture land

Income Tax Income from Capital Gains
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1

Could you please help me what is the tax liabilities for sale of agriculture land.
Thanks

2

Hi @angrejsim

Section 54B of the Income Tax Act, 1962, provides relief to individuals who sell their agricultural land and buy another agricultural land from that sale, subject to a few conditions as stated below.

  • This benefit can only be claimed by individuals or HUF.

  • The agricultural land must be used specifically for agricultural purposes.

  • The individual or his/her parents must use this land for agricultural purpose for at least two years immediately preceding the date on which the exchange of land occurred. In the case of HUF, any member of the HUF must use this land for agricultural purpose.

  • After selling agricultural land, the assessee will have to buy another agricultural land within two years from the date of selling.

  • In case of compulsory acquisition, the period of acquiring new agricultural land will be assessed from the date of receipt of compensation.

  • The entire amount of capital gains must be utilized for the purchase of agricultural land if not then the difference will be termed as capital gains and the tax will be computed accordingly.

  • The new agricultural land must not be sold within the period of 3 years from the purchase.

Also, here’s a complete guide on capital gains on sale of agricultural land.

3

It assessess sales of agriculture land urban value rs:15 lacs transformation f.y.22-23.but assessess purchase transaction f.y.15-16 not reported in it returns and accounting records entry passed.
Question:
Assessess sales transaction it returns show compulsory or not compulsory f.y.22-23.

4

Hi @Sundaraiah_Kollipara,

As per the IT Act, it is compulsory to report a sale of agricultural land while filing ITR, irrespective of whether purchase entry was reported or not.

Hope it helps.

5

Hi Team,

I am a salaried person and own ancestral land (in remote Village).

recently i sold 1 acers of land for 12.5 lks and leased some for the same amount for 30 years lease.

my question is

  1. Sale - Sale of land comes under exempt income however i have to show while filling the return.
  2. Lease - 30 years lease, i should show all agriculture income in one shot or can i divide the amount and show for 30 years.

Thanks,

6

Hi @Alex

The sale of land is exempt from tax, you can show it in your ITR.
And, the lease is similar to rent, you have to show lease rentals every year as and when received.

7

Hi,

I was reading this thread and you have mentioned that

The sale of land is exempt from tax, you can show it in your ITR.

How is it exempt in this case ? Please clarify if possible.