capital gain

[Guest]

namaskar,

an agrivultural land is sold by dividing it into three parts and as a result three registered deeds were made..is this liable to capital gain.?

[K.S.AIYAR & CO.]

If this land is an agriculture land within meaning of section 2 (14)(iii) of the IT Act, 1961, and continues to remain so even after division in to 3 parts, then there will be no capital gains tax since it will not fall under definition of term Capital Asset u/s 2 (14) of the Act. U/s 45 CG are chargeable on transfer of a Capital Asset only.

[kiran kumar]

where the agricultural land is situated ? is it rural agri land or urban agri land? if rural agri land no capital gain will attract.

AI Summary

Agricultural land classification may exclude sale from capital gains when land retains agricultural status after subdivision. If the land qualifies as agricultural land under the statutory definition and continues to be agricultural after subdivision into three registered parts, it is not a capital asset and transfer of such land will not attract capital gains tax; by contrast, rural agricultural land is generally excluded while urban agricultural land may be liable to capital gains.