• Whether conversion of agricultural land into NA land attract capital gain

1) I had purchased agricultural land on 20th day of February 2021.

2) The agricultural land is situated within 6 Kms from the municipal limits.

3) Subsequent to purchase compound wall construction began.

4) Application for conversion of land into residential purpose was obtained on 24-3-2022.

5) Provisional approval for Residential layout was obtained on 13-6-2022

Query 1: Agri Land was purchased in fin year 20-21 and conversion of land into NA was made during fin year 21-22. Will conversion of land result in any taxation by way of capital gains or will taxation be applicable as income from business after development/sale of Layout sites.

Query 2: If taxation will apply by way of capital gains during fin year 21-22 by virtue of NA conversion, then what will be the basis of taxation i.e what will be the sale consideration and cost of acquisition. If taxation will apply under capital gains what will be the reason for the same.