Sage-Tips

Where is show sale of rural agricultural land in income tax return?

Proceeds from sale of rural agriculture land is exempt from tax as rural agriculture land is not a capital asset. You need to file ITR-2 and show the entire proceeds under the “Schedule EI” under point 4.

Is capital gains tax payable on agricultural land?

As Rural Agricultural Land does not constitute a Capital Asset, therefore Capital Gains Tax is not levied on the sale of Rural Agricultural Land. This will apply irrespective of the value of the transaction and the capital gains tax on sale of agricultural land will not be levied in any case.

Is basic exemption limit available for long-term capital gain?

Adjustment of Long-term Capital Gain (Exemption) The basic exemption limit applicable in case of an individual for the financial year 2019-20 is as follows: The exemption limit is Rs. 5,00,000 for resident individual of the age of 80 years or above. The exemption limit is Rs.

Is income from selling land taxable?

Capital gains are income on sale of any capital asset in the hands of seller. So, any gain on sale of land or building by the owner is taxable as capital gain. Sale consideration reduced by cost of acquisition (indexed cost of acquisition for land or building held for more than 24 months) is taxable as capital gain.

How can I avoid capital gains tax on land sale in India?

Exemptions from your Gains that Save Tax Section 54F (applicable in case its a long term capital asset)

1. Purchase one house within 1 year before the date of transfer or 2 years after that.
2. Construct one house within 3 years after the date of transfer.
3. You do not sell this house within 3 years of purchase or construction.

How can I reduce my long term capital gains tax?

Five Ways to Minimize or Avoid Capital Gains Tax

1. Invest for the long term.
2. Take advantage of tax-deferred retirement plans.
3. Use capital losses to offset gains.
4. Watch your holding periods.
5. Pick your cost basis.

How much is capital gains tax on sale of land?

Capital gains taxes are due when farm or ranch land, buildings, breeding livestock and timber are sold. The tax is owed on the amount that the property increased in value since it was purchased. The current top capital gains tax is 20 percent.

Is land sale a capital gain?

According to IRS rules, just about everything you own is a capital asset, from your home or land to furnishings to investment shares in stocks and bonds. Generally, when you sell a capital asset for more than you paid for it, you have a capital gain.

What is long term capital gains tax (LTCG)?

When the sale or transfer of the property taken place after three years from the date of acquisition, the profits that are earned from the sale are called long term capital gains (LTCG). Such gains are subject to be taxed with indexation at 20\% plus applicable cess & surcharge.

How are long term capital gains taxed on sale of land?

Long term capital gains are taxed at a flat rate of 20\%. You can avail tax exemption on capital gain on sale of land (residential & urban agricultural land) under section 54EC and Section 54F of IT Act.

What happens to unutilised LTCG when buying a property?

If you are unable to find the right property or you invest that money in another property before the due date (usually 31st July) of filing your tax return, then the unutilised LTCG can be deposited under the Capital Gains Account Scheme (CGAS).

What is LTCG tax on sale of property in India?

Calculation of Long Term Capital Gain tax on sale of property in India The income tax rate for LTCG on sale of property in India is 20\% with Indexation benefit. Using the indexation benefit, the taxpayer can adjust the cost of the asset with the CII (Cost Inflation Index) List issued by the Income Tax Department.