Sold agricultural land in your hometown? Check if you must pay capital gains tax on the sale
Eshita Gain
What if agricultural land is located in a village?
When do you have to pay tax on such land sales?
Short-term capital gain (STCG): If the land was held for up to two years, gains are taxed under the owner's income tax slab.
Long-term capital gain (LTCG): If held for more than two years, gains are taxed at 20% with indexation benefit. The taxpayer, who must be a resident individual, can also pay tax at 12.5% without the indexation benefit.
How to determine whether land is rural or urban?
Up to 2 kms from the local limits of the municipality or cantonment board, if the population of such municipality or cantonment board exceeds 10,000 but does not exceed 100,000.
Up to 6 kms from local limits of the municipality or cantonment board, if the population of such municipality or cantonment board exceeds 1,00,000 but does not exceed 10,00,000.
Up to 8 kms from the local limits of the municipality or cantonment board, if the population of such municipality or cantonment board exceeds 10,00,000.
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