What is the tax implication u/s 50 C on sale of agricultural land

Dear sir,
What is the tax implication on sale of agricultural land If the Registred value and Sale Consideration will be same and fair market value exceeds registred value by income tax valuation Officer.
Asked 2 years ago in Income Tax from Guntur, Andhra Pradesh
section 50C is not applicable to sale of agricultural lands if it is exempt.
Vijay N. Kale
CA, Hyderabad
248 Answers
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Section 50C talks about the determination of the sales consideration in certain circumstances in order to compute the capital gain arising from the transfer of capital assets being land or building or both . Now first step in this case should be to understand whether the agricultural land is a capital assets or not . If it is not a capital assets , the applicability of section 50 C does not arises as it will not a taxable event .
Section 2(14) defines the term capital assets and it excludes the agricultural land subject to some usage and location condition . Considering these being fulfilled , the transfer of agricultural land is not chargeable to capital gain and thus this section does not trigger .
Assuming the section 50C triggers , then we should consider the following -
50C(1) - If the sale consideration is less than the value adopted by the stamp valuation authority - then the value of the stamp authority will be considered .
50C(2) - if the assessee claims that the stamp duty value is more than the fair market value on the date of transfer and he has not disputed such stamp duty value in any court of law , then the AO may refer thos matter to the valuation officer for the purpose of valuation as per section 55A of the Income Tax act.
50C(3) - Now if the fair market value determine by valuation officer is less than stamp duty value , the AO will consider fair market value . if the fair market value is more than the stamp duty value , the AO will consider the stamp duty value and not the fair market value .
Applying this in your case , even if the fair market value exceeds the stamp duty valuation rate , the stamp duty valuation rate shall be considered for the purpose of determining the sales consideration .
Prakash Sinha
CA, Delhi
112 Answers
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No need , As per our view If document value is same as Government stamp duty then there is no problem.
But if it is valued for any other reason by the department then need to have more clarity
Shyam Sunder Modani
CA, Hyderabad
1373 Answers
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Sale of Agricultural land in rural India is completely exempt from tax.

If the land is not in rural India, then the Stamp Duty Value (as per Ready Reckoner) will be taken as the Sale Consideration, and tax will be accordingly computed. 
Rohit R Sharma
CA, Mumbai
1680 Answers
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