No Exemption u/s 10 on Urban Agricultural Land – Explanation 1 to Section 2(1A)
While agricultural income is exempt from income-tax under Section 10(1) , Explanation 1 to Section 2(1A) , clarifies that capital gains arising from urban agricultural land would not be treated as agricultural income, and would this be chargeable to tax under Section 45.
Assets not considered as Capital Asset – Bonds
The following bonds would not be considered as a Capital Asset : –
- Specified Gold Bonds : – 6½% Gold Bonds, 1977, or 7% Gold Bonds, 1980, or National Defence Bonds
- Special Bearer Bonds, 1991 issued by the Central Government;
- Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 or deposit certificates issued under the Gold Monetisation Scheme, 2015 notified by the Central Government .
Capital Assets
| Items | Capital asset | Reason |
| Stock-in-trade, Consumable stores, Raw material | No | Excluded from definition of capital asset . |
| Movable property held for personal use [Wearing apparel, home furniture, etc ) | No | It would be Personal Effects |
| Rural Agricultural land | No | Excluded from definition of capital asset |
| Gold deposit bonds 6 .5% Gold bonds 7% Gold bonds National Defence Bonds Special bearer bonds |
No | Excluded from definition of capital asset |
| Land held for personal use | Yes | Only movable property is treated as personal effect. Land is immovable property .
|
| Urban agricultural land | Yes | Only rural agricultural land is excluded from the definition of capital asset
|
| Jewellery Archaelogical collections Drawings Paintings and sculptures Any work of art |
Yes | Excluded from the definition of Personal Effects
|
For any queries, please write them in the Comment Section or Talk to our tax expert
Related Content
