TaxTMI 
TaxTMI 
Group of farmers have decided to sale 44acres of land to agri industry. This land is 8km away from city limits (aerial distance) and the population of village is less than 100000. Farming is carried out since 10years. Will they be liable for any tax as they sell the land to industry?
Agriculture land sold to agricultural industry, Will it get capital gain tax or Income tax?
21 Aug 2016 
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Agricultural land classification determines capital gains tax exposure based on municipal population and specified aerial distance criteria.
Tax characterization of proceeds from sale of farmland depends on whether the land is excluded from the capital asset definition: agricultural land is exempt from capital asset treatment unless situated within specified municipal jurisdictions or within prescribed aerial distances from municipal limits tied to population bands; if the land falls within those limits it is not treated as exempt agricultural land for capital gains purposes. (AI Summary)
Tax characterization of proceeds from sale of farmland depends on whether the land is excluded from the capital asset definition: agricultural land is exempt from capital asset treatment unless situated within specified municipal jurisdictions or within prescribed aerial distances from municipal limits tied to population bands; if the land falls within those limits it is not treated as exempt agricultural land for capital gains purposes. (AI Summary)