Urban agricultural land is a capital asset and any gain arising from the sale will be treated as a Capital Gain.
Whether the Capital gain is for long term/short term will depend upon the period of holding of the asset concerned.
If the period of holding is more than 3 years then the capital gain arising will be termed as long term capital gain. If the holding period is shorter, then the gain arising is termed as short term capital gain.
Long term capital gain is taxable at 20% whereas short term capital gain is chargeable at slab rate*.
Rural agricultural land is not a capital asset and therefore gain arising from it will not be taxed.
*Slab Rate FY19-20:
|
Taxable Income |
Slab Rate |
|
Upto Rs.2,50,000 |
NIL |
|
Rs.2,50,001 to Rs.5,00,000 |
5% |
|
Rs.5,00,001 to Rs.10,00,000 |
20% |
|
More than Rs.10,00,000 |
30% |
Slab rate FY 20-21(New Tax Regime, if applicable):
|
Taxable Income |
Slab Rate |
|
Upto Rs.2,50,000 |
NIL |
|
Rs.2,50,001 to Rs.5,00,000 |
5% |
|
Rs. 5,00,001 to Rs, 7,50,000 |
10% |
|
Rs.7,50,001 to Rs.10,00,000 |
15% |
|
Rs. 10,00,001 to Rs. 12,50,000 |
20% |
|
Rs. 12,50,001 to Rs. 15,00,000 |
25% |
|
More than Rs. 15,00,000 |
30% |
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