Agricultural land classification determines whether specified land transactions and compensation payments fall within applicable withholding requirements.

Agricultural land under the Income-tax Act, 2025 is defined for specified TDS/TCS entries by reference to whether the land is situated in areas covered by section 2(22)(iii). Under the Income-tax Act, 1961, transfer-related withholding excludes agricultural land situated in areas specified in section 2(14)(iii)(a) and (b), whereas compensation-related withholding includes such land. These definitions determine the relevant withholding treatment of land in specified areas.

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