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Capital gain tax

(Querist) 07 July 2012 This query is : Resolved 
Dear sir,

Recently we sold our ancestral agricultural land. From the sale me and my mother got the share. We are also expecting to get the letter from talathi regarding the population of the village less than 10,000 and 8kms limit. Me and my mother are planning to purchase a property [flat] jointly with our respective share. In case if we are not able to get a letter from the talathi is this ok?
If capital gain tax is applicable can we take the same flat jointly? Please advice.

pls reply
Ganesh babu (Expert) 14 May 2013
2 (14) “capital asset” means property42 of any kind held by an assessee, whether or not connected with his business or profession, but does not include—
iii)agricultural land in India, not being land situate—
(a) in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the last preceding census of which the relevant figures have been published before the first day of the previous year ; or
(b) in any area within such distance, not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (a), as the Central Government may, having regard to the extent of, and scope for, urbanisation of that area and other relevant considerations, specify in this behalf by notification in the Official Gazette
Since Agricultural land is not a Capital asset hence any gain arising from the sale of property which is not a Capital Assest does not attract tax on such Capital Gain/ loss.
hope this will help you.
Ganesh babu (Expert) 14 May 2013
refer notification no.9447 dated january 1994

if it is not with in the definition of capital asset it can be taken as not capital asset transfer and hence capital gain tax not applicable

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