Is Sale Of Agricultural Land Taxable?

What is agricultural land as per income tax?

Agricultural land has not been defined in the Income Tax Act but in common parlance, agricultural land is a land on which agricultural activities are carried out.

This is important because as per Section 2(14) of the I.T.

Act, agricultural lands which are not situated in specified areas are not Capital assets..

What are the types of agriculture income?

These types of agricultural incomes are :Any income received as rent or revenue from agricultural land. … Income derived from Agriculture. … Any income accruing to the person by the performance of any process to render the produce marketable.More items…

Is sale of land taxable under GST?

Selling land does not attract GST. … GST is not applicable to the sale of land because it is neither treated as supply of goods nor the supply of services as per Schedule III of the CGST Act, 2017.

Do I need to pay tax if I sell my land?

When you sell a property, be it a home or land, you have to pay capital gains tax on the same. Capital gains tax is of two types- Short-Term Capital Gains (STCG) for a property held for less than 36 months and Long-Term Capital Gains (LTCG) for above 36 months. … For LTCG, the current tax rate is 20%.

Is agricultural income tax free?

According to Section 10(1) of the Income Tax Act, agricultural income is not considered a means of income. Income generated from agriculture is exempted from taxation by the Central Government.

Is agricultural land subject to capital gains tax?

Capital Gains Tax is the tax payable on the increase in the value of a business asset, for example agricultural land and buildings, business property, shares and goodwill. … There is no Capital Gains Tax payable on transfers arising at death.

Is sale of land considered income?

The sale of land is a taxable event if you sell it for a profit. The taxes on land sales can be pretty steep if your land has greatly appreciated in value since you bought it. However, there are ways to reduce the amount of taxes that you pay.

How do I avoid paying taxes when selling land?

If you have sold land or investment real estate and realized a profit, the IRS is likely standing in line to collect capital gains tax on the sale. Fortunately, you can avoid paying tax by completing a 1031 Exchange, where the proceeds from the sale are used to purchase similar land or property.

Is sale of agricultural land exempt from capital gains tax?

As Rural Agricultural Land does not constitute a Capital Asset, therefore Capital Gains Tax is not levied on the sale of Rural Agricultural Land. This will apply irrespective of the value of the transaction and the capital gains tax on sale of agricultural land will not be levied in any case.

Is income from sale of land taxable in India?

So, any gain on sale of land or building by the owner is taxable as capital gain. Sale consideration reduced by cost of acquisition (indexed cost of acquisition for land or building held for more than 24 months) is taxable as capital gain.

How agricultural income tax is calculated?

4,00,000/- as salary income and Rs. 90,000/- as agricultural income for the assessment year 2018-19 or 2019-20. b. Calculate tax on basic exemption limit + agricultural income i.e….How to calculate tax on agriculture income for AY 2019-20 ?ParticularsAmountTax on remaining Rs 90,000 @ 5%4,500Total Tax4,500*1 more row•Jul 17, 2020

Are agricultural products taxable?

During the production phase, raw materials are generally subject to value-added tax (VAT) except for agricultural and marine products (raw materials for food production) which are VAT-exempt. … For the company’s taxes, there is either VAT or percentage tax and, of course, income tax.

How can I avoid capital gains tax on agricultural land?

Conditions you need to meet Under Section 54B for claiming exemption from Capital Gains. The exemption is available to an Individual or a HUF. … Amount of Exemption. If the cost of the new agricultural land purchased is more than the number of capital gains, entire capital gains are exempt.Jan 4, 2021

How do I avoid capital gains tax when selling a farm?

1031 Exchanges Named after the section in which it is found in the U.S. Internal Revenue Code (IRC), it is also known as a “like-kind exchange.” A 1031 exchange allows a seller to sell an investment property and defer capital gains taxes as long as the sale proceeds are invested in a replacement property.

How can we show sale of agricultural land in income tax?

Proceeds from sale of rural agriculture land is exempt from tax as rural agriculture land is not a capital asset. You need to file ITR-2 and show the entire proceeds under the “Schedule EI” under point 4.