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I-T fears haunt land pooling farmers
Farmers who gave their lands for the construction of capital are worrying over Income Tax to be paid under the Long Term Capital Gains Tax Act. With Centre dilly-dallying over special status and no response to the State government’s request to exempt tax, the farmers’ joy of receiving plots from CRDA is marred by the tax calculations.
Amaravati: Farmers who gave their lands for the construction of capital are worrying over Income Tax to be paid under the Long Term Capital Gains Tax Act. With Centre dilly-dallying over special status and no response to the State government’s request to exempt tax, the farmers’ joy of receiving plots from CRDA is marred by the tax calculations.
The CRDA has pooled 35,000 acres of land from farmers under the land pooling and would be allotting residential and commercial plots in the capital area. Farmers, who have to pay user and betterment charges for the land to be allotted will have to pay capital gains tax to the Income Tax department for the land sold to the CRDA.
Under the condition of anonymity, a senior official in the Income Tax department told The Hans India that the farmers would have to pay tax as no exemption is accorded. “If the Centre accords special status then they may get exemption but until then we will abide by the rules and collect tax,” the official adds.
It should be recalled that the State government has written a letter to the Centre requesting exemption of capital gains tax to the farmers, who gave lands for the construction of the state capital.
Detailing the concepts of capital gains tax, Muppavarapu Krishna Rao, a Chartered Accountant (CA) said that the lands within the radius of 8 km from the end of municipal limits come under Section 10 (37) of the long term capital gains tax. “If the farmers sell their lands, they would have to pay tax registration value of land.
Even though the State government has written a letter, it is difficult for the Centre to give Income Tax exemption to one State or region as States like Punjab, Haryana and Delhi are also implementing land pooling,” he added.
