Tranfer of Agricultural Land
Krishnakumar Pillai
(Querist) 15 January 2010
This query is : Resolved
1. Is it possible for a service person ( a Mumbai domicile ) to acquire a farm land ( around 5000 sq ft ) in Maharashtra without being a farmer or hold any land in any part of India.
2. What is the procedure to convert Agricultural Land in NA Land for small property of around 5000 sq ft.
3. What would be Tax implication and can the said land be sold to other buyers ?
Vivek Banginwar
(Expert) 15 January 2010
Apply to Addl. Collector for convert the land NA in prescribed format with sanctioning map of architecture.
A V Vishal
(Expert) 15 January 2010
1. Is it possible for a service person ( a Mumbai domicile ) to acquire a farm land ( around 5000 sq ft ) in Maharashtra without being a farmer or hold any land in any part of India.
Ans.You can not purchase agricutural land except with a prior permission from Collector u/s 65 and 43 of The Bombay Tenancy and Agricutural Lands Act, 1948, otherwise the land would vest in prior owner or the Government. However, sale of agri land is not permitted to non agriculturist.
2. What is the procedure to convert Agricultural Land in NA Land for small property of around 5000 sq ft.
Ans.Permission for non-agricultural use:
Section 42 of MLR Code 1966 states that, "No land used for agriculture shall be used for any non-agricultural purpose; and no land assessed for one non-agricultural purpose shall be used for any other non-agricultural purpose without the permission of the Collector."
However the same act is amended and from the 1st day August 2008 no non-agricultural permission is required to obtain in the area other than city if person is constructing residential building for personal use.
The development (residential building) should not be in contravention of the provisions of any law, or any rules, regulations or orders made or issued, under any law for the time being in force, by the State or Central Government or any local authority, statutory authority, Corporation controlled by the Central or State Government or any Government Company pertaining to management of Coastal Regulation Zone, or of the Ribbon Development Rules, Building Regulations, or rules or any provisions with regard to the benefited zones of irrigation project and also those pertaining to environment, public health, peace or safety and if the land is falling outside the limits of;
Eco-sensitive Zone,
the area within eight kilometres from periphery Greater Mumbai,
the area within five kilometres from the periphery of each of Cities of Pune and Solapur,
the area within one kilometres from the periphery of the Cities of Nagpur and Kolhapur,
the area within one kilometer from the periphery of each of `A' Class or 'B' Class municipal areas,
This amendment is made only for conversion of use of land from agricultural to non agricultural purpose. A person has to obtain permission for constructing house from concern department. (Grampanchayat and if applicable Town Planning)
Under section 44 of the Maharashtra Land Revenue Code 1966, before carrying out any development on the land, an eligible person has to apply to the collector for the permission to convert the use of agricultural land for any non-agricultural purpose, or to change the use of land from one non-agricultural purpose to another non-agricultural purpose.
3. What would be Tax implication and can the said land be sold to other buyers ?
Ans.Sale of Agricultural land:
The following points are important to consider while deciding whether the agricultural land is coming under the capital assets: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
In any area within such distance, not being more than eight kilometers, 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, urbanization of that area and other relevant considerations, specify in this behalf by notification in the Official Gazette.
In simple terms the above statement means,
If the land is situated under municipalty area where the population is above 10000 or the distance from the municiplaty to the specified land is less than 8 KM, then the land is not agricultural land.
Once if the above conditions met, you have decided that the land is agricultural land. Then you need not pay any tax for the sale on your agricultural land. The profit from the agricultural land is completely tax free. Because the land is not falling under the capital assets as the law defines the acpital assets.
In nut shell , one can claim exemption form capital gains on Sale of Agriculture Land by buying Agriculture land if the agricultural land which was was being used by the assessee or a parent of his for agricultural purposes at least two years preceding the year in which transfer of the land took place if
the assessee has, within a period of two years after that date, purchased any other land for being used for agricultural purposes, then, capital gain to the extent utilised for buying the new agriculture land shall be given.
It is to be noted that sale of non agricultural lands attract capital gains.
adv. rajeev ( rajoo )
(Expert) 22 January 2010
to purchase the agrl., land by non farmer permission from Asst., Commissioner is mandatory.
You will have to file an application before the AC to convert the agrl., land in to NA land. You can sell it.
