Answer: You can buy agricultural land from sale proceeds. There are no tax setoffs available. In addition, capital gains will be taxed. To save tax, you can put at least Rs 50 lakh in bonds.

What is the capital gains tax rate on farm land?

20 percent
Capital gains taxes are due when farm or ranch land, buildings, breeding livestock and timber are sold. The tax is owed on the amount that the property increased in value since it was purchased. The current top capital gains tax is 20 percent.

What’s the difference between sale of farmland and sale of house?

Where a sale of farmland includes a residence or house, the sale is viewed as two separate sales: the portion that includes the house plus the land that is necessary for the use and enjoyment of the house, and the remaining portion of land. This Info Sheet applies to the sale of the remaining farmland.

When to sell farm land at absolute auction?

The farm – land, equipment and household goods – is going to be sold at absolute auction in 2013 to settle an estate. The method of sale has been decided among the heirs, so I want to make it clear that the sales method is not what I am asking about.

What happens if I Sell my farmland to my daughter?

The sale of your farmland to your daughter and her husband would be taxable if they were to continue the farm business. However, if they decide to use it for their own personal use instead of farming the land, GST/HST would not apply to the sale.

Is the sale of farmland by an individual taxable?

Farmland also includes any portion of vacant land (e.g., a bush area) that may not be used directly in a farming business. In addition, any fixtures on the farmland (e.g., a barn or a corral) form part of the farmland. The sale of farmland by an individual is usually taxable although there are limited circumstances when it is exempt.