Sale of Agricultural land

[deepak gulati]

If on sells Agricultual land ( not a capital asset being situated beyond 8km from municpility and population less than 10000 ), but sale deed is prepared as Industrial land ( to save stamp duty on purchase of land for industry as per state policy). Whether sale of land will be exempt or not ?

AI Summary

Agricultural Land Sale Exempt from Capital Gains Tax Due to Rural Location Over 8 km from Small Municipality A query was raised regarding the sale of agricultural land, which is not considered a capital asset due to its location beyond 8 km from a municipality with a population under 10,000. The sale deed was prepared as industrial land to save on stamp duty. The response clarified that the establishment of an industry can occur in rural or urban areas. Since the land is agricultural and located in a rural area as defined by the Income Tax Act, it is not a capital asset, and the seller can claim an exemption from capital gains tax.