Question ID :
44974
Taxability of amount received on Sale of Agricultural Land
One of the farmer (Owner) has sold his agricultural land which was situated within the limits of Municipal Corporation to a Builder for a monetary consideration of Rs.1,10,00,000. On the said land another person was having unauthorized possession. To clear this unauthorized possession builder also made payment of Rs.40,00,000 to that person and also deducted TDS u/s 194IA. In this case whether amount of Rs.40,00,000 received by that person will be taxable as Capital Gain? If not how exemption can be claimed?
Posted by
CA Ravish Thakur
on
Mar 25, 2026
Filed Under
Direct Taxes
Rs. 40.00 Lakhs is taxable as capital gain because there is transfer of right. Long Term or short term will depend on its holding period
Posted by
CA. SATISH CHAND GARG on
Mar 26, 2026
Answer ID :
86135
Can it be claimed as exempt since there is no cost of acquisition for the land held in possession? If can not then which exemptions are availablle against the capital gain...since he is not a owner, benefit of indexed cost of acquision will not be available to him.
Posted by
CA Ravish Thakur on
Apr 14, 2026