Your queries: Income Tax; No capital gains tax on agricultural land sale proceeds

• September 23, 2023
• CA Chandan Agarwal's Office

Since shares are considered “movable property”, it is not mandatory to execute a gift deed.

I have sold agricultural land. Do the sale proceeds attract capital gains tax? Is it mandatory to show in ITR?

Subject to certain conditions, agricultural land is not considered as a capital asset. Therefore sale of agricultural land will not attract capital gains tax and shall require a disclosure under Schedule Exempt Income in the ITR.

* We have two residential flats, both in the joint name of my wife and I (first name being my wife’s). One flat is rented out and the rental income is received in my account. Can I consider this full rental income in my IT return?

— Mohan Pillai

No, the rental income shall be split between you and your wife equally in case of joint ownership.

* My son joined a company as an engineering intern and after four months it was converted into regular employment. During internship he was paid a monthly stipend and TDS at 10% was deducted by the employer under Section 194 J(b). Will the stipend constitute income and be subject to tax? Also, are there any deductions allowed for income under this section?

— T V Mahadevan

As per Section 10(16) of Income Tax Act 1961, scholarships granted to meet the cost of education are exempt from income-tax. If the primary purpose of payment of stipend is to further the education and training of the recipient, the amount received shall not be considered as salary but in the scholarship.

I want to transfer some shares to the demat accounts of my daughter and NRI son as a gift. Should I execute a gift deed?

— R S Agarwal

Since shares are considered “movable property”, it is not mandatory to execute a gift deed. However, in order to create a legal record, it is best to execute one. A simple acknowledgement may also serve the purpose. Further, please note that capital instruments are permitted to be transferred to NRI by way of gift subject to satisfaction of certain conditions and guidelines of RBI in this regard.

Source: https://www.financialexpress.com/money/your-queries-income-tax-no-capital-gains-tax-on-agricultural-land-sale-proceeds-3252254/