Tax liabilities on sale of agriculture land

Income Tax Income from Capital Gains
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Hi @Shiro_Patil,

Yes, you’ll need to pay tax on the sale of your farmland depending on its location:

  1. Rural Agricultural Land: No capital gains tax.
  2. Urban Agricultural Land: Subject to long-term capital gains tax (since you held it for more than two years). If you’ve sold the land after 23rd July 2024, you have the choice to pay tax at the rate of 12.5% without indexation benefit or 20% with indexation. If the land was sold before that, 20% tax with indexation will be applicable.

If your total tax liability exceeds ₹10,000, you’ll also have to pay advance tax to avoid penalties. For capital gains, advance tax needs to be paid in the Quarter in which you have actually realised the gains.

Here’s a detailed read on how you can calculate and pay advance tax: Advance Tax: Eligibility, calculations and due dates

Hope this helps, let me know if you need any further clarifications.