A piece of land used for agriculture is known as agricultural land. This article focuses on the tax that would be charged on capital gains resulting from the sale of agricultural land in India. A piece of agricultural land may be located either in a rural or non-rural region. Both scenarios will have different tax simplifications. Any gain or loss resulting from the transfer of a financial asset will, as appropriate, be regarded as a capital gain or loss. In this article we will discuss all about the Capital gain tax on Agricultural Land.
Understanding the distinction between land used for urban and rural agriculture is important.
1. Rural Agricultural land: Agriculture land in the country which refers to a piece of Indian agriculture. The cases in which the land is considered as an agricultural land are-
2. Urban agricultural land: Urban agricultural land is land that is utilized for agriculture and is located in a specific area. The cases in which the land is considered as an agricultural land are-
Specified locations in regards to urban agricultural land-:
Suggested Read: How to start an Agricultural Business in India?
The sale of agricultural land located in urban area would be subject to capital gains tax as agricultural land located in an urban area would be regarded as a capital asset. In such a scenario, capital gains tax would be calculated similarly to calculated when selling any other type of property. To determine the capital gain tax on agricultural land, the Sale Price would be subtracted from the Acquisition and Improvement Costs.
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