I was entitled to a minor share in family land. Land was not partitioned. I verbally agreed with other family members to accept a smaller share of sale amount. Land was sold. The Sale Deed mentions the payment to me and describes me as one of the vendors and a ‘Consentiong Party’. CAN I TREAT THIS AS CAPITAL GAINS? OR WILL ID DEPT TREAT IT AS ‘ OTHER INCOME’? I understand it would have been better if I had exexuted a Relinquishment Deed before the Sale Deed, but I did not have correct guidance.
Hi,
Yes, it will be treated as capital gain only. I could not understand why do you think that this can be treated as other income.
Further, sale of agricultural land situated in rural area is exempt from capital gain tax.
Rural agricultural land is Specifically defined under the income tax act
Hi,
Hope you are doing well !
It will be treated as capital gain only.
However, 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. Also 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.
Thanks & Regards,
Payal Chhajed
Futher, it will not be treated as income from other sources .
Thank & Regards,
Payal Chhajed
Hi,
It will be treated as capital gain only. There is no provision under which it can be considered as income from other sources.
Please get in touch for further clarifications.
Thanks and regards,
Nikhil
Proceeds from rural agricultural land is exempt. In case of urban agricultural land it will be treated as transfer of capital asset and your share will be taxable if there is capital gain which will be known after calculation.
However, if it is a rural agricultural land then it is not considered as a capital asset and hence no capital gains tax.
Hope that clarifies.
Regards,
Nikhil
Dear Sir,
It will be treated as capital gain only.
Also, 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.
Warm Regards,
Karishma Chhajer
Dear Sir,
Can you please share your understanding for treating it as other income.
Warm Regards,
Karishma Chhajer
Hi,
Could you please explain why are you thinking it may be considered as other income?
Thanks & Regards,
Payal Chhajed
Hi,
Treat this as capital gain, there is no other way.
{Your share of sale - your share of cost (indexed to present date) - selling expenses}= Capital Gains
Thanks
Damini
I am worried ITO may consider it as INCOME FROM OTHER SOURCES. The Sale Deed did not idntify a part of land as mine. It mentioned me as Vendor 5, the amount paid to me, and stated’’VENDOR NO.5 JOINED EXECUTION OF THE SALE DEED AS CONFIRMING PARTY AT THE REQUEST OF THE PURCHASER TO AVOID FUTURE COMPLICATIONS, SHE BEING THE SISTER OF LATE ....(who originally owned the land)”.
If your name is mentioned in the sale deed then it is completely prooved as capital gain and not income from other sources.
If your name is mentioned in the deed, it will be treated as capital gains only.
Hope that clarifies.
Hi
No. It shall not be considered as other income.
Provisions of capital gains shall be applicable.
However, it was a rural agricultural land, it shall not be considered as a capital asset and hence exempt from tax.
Hi,
Hope you are doing well !
It will be treated as capital gain only.
It shall not be considered as other income.
Thanks & Regards,
Payal Chhajed
Dear Sir,
If your name is mentioned in the sale deed, it will be treated as capital gains only and not income from other sources.
Warm Regards,
Karishma Chhajer
In that case, it may be a litigative situation.
Also, please let us know how do you caliming theis land to be yours? Did you receive it by way if any will?
Because, by inheritance property goes to children and spouse and not to sisters.
Hi
Since your name is included in Sale deed so it will be treated a capital gain only..
Hope it suffice
It seems that there is no documentary proof of your share hence there is much chances to treat it other income as per sec 56
Hi,
In cases like these the nature of transactions need to be considered. As you have inherited the property the amount so received shall be taxed as capital gains just like other parties to the agreement.
Even though the agreement mentions you as Vendor 5, the fact of the matter remains that you are foregoing your right on the asset.
On the basis of facts we can give a reply to the ITO if in case they treat the income as income from other sources to which can agree to treat it as capital gains.
Hope your queries are resolved!
