INCOME TAX & CAPITAL GAIN TAX ON SALE OF AGRICULTURE LAND
(Querist) 22 September 2009
This query is : Resolved
I am a retired Army officer,aged 73 yrs.
InApr09,I sold some Agriculture Land ,
inherited from my parents,who are no longer alive. This land was alloted to my Grand Father in 1949, in lieu of land left in Pakistan.I have only 2 sons.My wife expired in 2007. The entire amount was deposited in our HUF Acct.Out of this, I gave 1/3rd to each of my sons by cheque(to their NRO Accts) as their share & I took only 1 Lakh.Balnce in HUF Acct was put in HUF FDs. All of us Income Tax Assessees, have been allotted PAN & file our IT Returns regularly. My sons & myself also put our respective amounts in Bank FDs. Please advise on following---
a. Is the Sale Proceeds exempt from I.Tax
or is it taxable ?
b.Is the amount given to my sons & myself
to be shown in IT Return as Capital
Receipt(inherited) & thus IT Exempt in
Exempt Income Sec of ITR or is it to be
shown as Income FromOtherSources & thus
added to the Gross Income for calcu-
lation of Income Tax ? Or should we show
it as Gift from HUF ? Is Gift from HUF
legally allowed ? The aim is to legally
reduce the I.Tax to barest minimum.If is
is to be shown as Gift, what documents
should we keep in file in support ?
c.Will the Interest on FDs be treated as
HUF Income or our Respective Income ?
2.The HUF Acct is being maitained since last about 10 yrs and only Farm Income was being deposited in it. The Income was being
put in Bank FDs & interest earned was added
in the IT Returns every year.
3.I will appreciate an early advice to enable us to work out the Advance Tax etc in time & deposit the same by due date.
major Bhupal Singh ( Retd.)riven
Raj Kumar Makkad
(Expert) 22 September 2009
Major Bhupal Singh Ji! As the agricultural income and agricultural land transfer both are not leviable for income tax/capital gain, though the agricultural income is shown in IT Return but the same is not taxable hence in your case, no tax is payable. Fill IT returns as usual as of HUF.riven
(Querist) 23 September 2009
My Dear Raj Kumar ji,
I appreciate your prompt advice. I am not only honoured but grateful to you too.
Thanks a lot.
2. May I request you to advise on--
a. should the entire sale Proceeds be
declared in HUF IT Return or Can we
declare as per the amounts given to
each member of the HUF ( eg 6L to
each son, 1L to me & 5L to HUF ) ??
b. Should we show the amount in the
Exempt Income Sec of ITR-2 form or
should it be shown under "Income
From Other Sources" with a remark
as" Exempt Income" & NOT included in in the Gross Income while computing
Income Tax ??
2. I will apprecaite an early response.
3. Inconvenience is regretted.
Major Bhupa Singhriven
Raj Kumar Makkad
(Expert) 23 September 2009
You can declare as per the amounts given to
each member of the HUF and show the amount in the Exempt Income Sec of ITR-2 form.riven
(Querist) 24 September 2009
My Dear Rajkumar ji,
I am indeed thakful to you for your advice. May God bless you with best of health & prosperity for ever.
Presently I am abroad. I shall certainly
come & thank you in person on return to india.
Major Bhupal Singh,Veteranriven
(Expert) 11 October 2009
Well advise by Mr. Raj Kumar