If the agriculture land sold in maharashtra is under Nagar Panchayat of around 40000 population, does it come under rural and not a capital asset gains? So no LTCG Tax? To prove, which authority can attest if its rural or urban? Nagar Panchayat is rural transitioning to urban but not fully urban category. Right?
- Rural agriculture land is not a capital asset therefore no capital gain on sale of such asset
- You have to prove both the factors i.e. rural land and agricultural use. Distance is to be calculated from municipality corporation/cantonment board. What is the aerial distance between land and the municipality corporation/cantonment board under which land is located?
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How far is your land from nearest municipality?
Considering the land as rural or urban would depend on same.
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The land falls within Nagar Panchayat jurisdiction limit (aerially 5km from the panchayat office building). And Nagar Panchayat population is around 20,000. Also the land is regularly cultivated. 1. Is Nagar Panchayat consider as urban Municipality bodies referred in your answers, since Nagar Panchayat are somewhere between gram panchayat and municipal councils. 2. Are BOTH the population criteria and distance criteria must or one of them is enough to classify as rural? 3. Who is the authority that classify this land and issue formal document? Is it part of sale deed? I don't see 7/12 or property tax mention classification
Nagar Panchayat Status: Nagar Panchayats may be considered urban or rural for LTCG purposes based on criteria like population and development. The exact classification under the Income Tax Act depends on additional factors.
Rural Classification Criteria: Either population size or distance from an urban center can classify land as rural for LTCG purposes, not necessarily both.
Authority for Documentation: The classification is typically determined by the Revenue Department or District Collector. Formal documentation, such as a certificate, can be obtained from them, even though it may not be part of standard property documents like the 7/12 extract.
Given your situation and the complexities involved, consulting with a professional is recommended. You can also consider taking my advice for a detailed analysis and assistance in navigating these requirements.
I think nagar panchayat and municipality is different and hence you need to check aerial distance from nearest municipality and since the population is around 20000 it's distance from municipal limits should not be more than 2 kilometers.
Aerial distance is dependent on population so yes both are related.
In your case, aerial distance from Nagar panchayat and population of Nagar Panchayat should be considered. As the population of Nagar Panchayat is more than 10,000 and less than 1,00,000 and aerial distance is beyond 2 km from Nagar Panchayat, land should be considered as rural land. Further, the classification should be clearly mentioned in the sale deed. In respect to agriculture use, you can submit proofs of receipts of sale of crops to arthiyas or Form J or any other form prevalent in your area.