The Finance Bill 2013 has increased (w.e.f 01.04.2013) the base for taxation for transfer of agricultural land as defined under the provisions of section 2(14)(iii) of the Income Tax Act. So far by virtue of the above provision, tax on transfer of agricultural land had been excluded from the ambit of capital gains tax except the following situations:- 1. If the land is situated in any municipality, (known as municipality or municipal corporation, notified area committee, town area committee, town committee or any other name) cantonment board provided the said area does not have a population of less than ten thousand. 2. If the land is situated in any area which is located within two kilometers ( areal route) from the local limits of any municipality or cantonment board as referred to in item (1) and which has a population of more than ten thousand but not exceeding one lakh. 3. If the land is situated in any area which is located with six kilometers ( areal route) from the local limits of any municipality or cantonment board as referred to in item (1) and which has a population of more than one lakh but not exceeding 10 lacs. 4. If the land is situated in any area which is located with eight kilometers ( areal route) from the local limits of any municipality or cantonment board as referred to in item (1) and which has a population of more than ten lacs. Population means the population according to the last preceding census for which thefigures have been published before the first day of the previous year. The details of population can be obtained from the website censusindia.gov.in The above provision will come into effect from the assessment year 2014-2015 which means that any transfer of agricultural land falling within the provisions above will attract capital gains tax from 1st April 2013.
Posted on: Fri, 14 Jun 2013 08:17:41 +0000
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