Where is show sale of rural agricultural land in income tax return?

Proceeds from sale of rural agriculture land is exempt from tax as rural agriculture land is not a capital asset. You need to file ITR-2 and show the entire proceeds under the “Schedule EI” under point 4.

What is the exemption limit for agricultural income?

Total income, excluding net agricultural income, surpasses the basic exemption limit (Rs. 2,50,000 for individuals below 60 years of age and Rs. 3,00,000 for individuals above 60 years of age).

How can I avoid capital gains on land sale?

If you have sold land or investment real estate and realized a profit, the IRS is likely standing in line to collect capital gains tax on the sale. Fortunately, you can avoid paying tax by completing a 1031 Exchange, where the proceeds from the sale are used to purchase similar land or property.

Is income from sale of agricultural land taxable?

Agricultural land in Rural Area in India is not considered a capital asset. Therefore any gains from its sale are not taxable under the head Capital Gains. Under Section 10(37) of the Income Tax Act, Capital Gains on compensation received on compulsory acquisition of urban agricultural land is exempt from tax.

Can agricultural land be purchased in cash?

You can sell an agriculture land or any other type of land and receive cash payments. To make this transaction transparent and legal, mention the same amount you received in the sale deed and pay the stamp duty based on that amount.

Is TDS applicable on agricultural land?

TDS not applicable on Sale of Agricultural Land However, Section 194IA for TDS on Property is not applicable on sale/purchase of agricultural land. Even if the transaction value is more than Rs. 50 Lakhs – TDS on Property will not be applicable on sale/purchase of agricultural land.

How is agriculture income calculated?

Q- How to calculate tax on agricultural income?

1. Agriculture income and non agriculture income added.
2. Calculate tax on total income.
3. Add basic exemption limit to net agriculture income.
4. Calculate income tax on step 3.
5. Deduct the amount of tax calculated in step 4 from the amount calculated in step 2.
6. Subtract rebate under 87A.

Is selling land a capital gain?

The IRS considers land to be a capital asset just like other types of real estate or shares of stock. As such, when you sell it, you will be liable for capital gains tax if the sale is profitable.

Can agricultural land be sold in cash?

The Central Board of Direct Taxes (CBDT), in its latest Circular, clarifies that any cash sale of an amount of Rs. 2 lakh or more by a cultivator of agricultural produce is prohibited under section 269ST of the Act.

Can agriculture income be received in cash?

Therefore, no disallowance under section 40A(3) can be made if the trader makes cash purchases of agricultural produce from the cultivator. Further, section 269ST, subject to certain exceptions, prohibits receipt of Rs. 2 lakh or more by a cultivator of agricultural produce is prohibited under section 269ST.

Is sale of agriculture land taxable in India?

Taxability of sale of Agriculture Land in India Sale of land can result in two kinds of incomes. If the land is held as stock in trade then the sale of such lands results in business income.Whereas, if the land is held as investment then the income on the sale of the land results in Capital Gain.

Is agricultural income taxable under Section 10(1)?

Though being exempted from tax through Section 10 (1), tax on agricultural income still persists in the state level if the mentioned income exceeds INR 5000 per year and if the total income excluding agricultural income is more than the basic exemption limit.

Is there capital gains tax on sale of agricultural land?

Holding Agricultural Land as Stock-in-Trade: If you are into buying and selling land regularly or in the course of your business, i.e., if you hold agricultural land as stock in trade then in such a case, any gains from its sale are taxable under the head Business & Profession, i.e., no capital gains shall be chargeable on such agricultural land.

Is agricultural land in rural areas of India considered a capital asset?

Agricultural Land in Rural Area in India is not considered a capital asset. Therefore, any gains from its sale are not taxable under the head Capital Gains. As per Section 2 (14) of the Income Tax Act, 1961 Capital Assets does not include- “agricultural land in India, not being land situate-