My father now aged 65 years, had purchased the agricultural land in Gurgaon area (Farukh Nagar) in 1987. He sold this land in 2011 at Government circle rate. The money was received by demand draft. He has not filed any income tax return. Please advice if the amount he got by selling that land is taxable or not?

  • 3
    Please improve you question by wording it in a succinct manner. Else it will be very difficult for people to answer it.
    – DumbCoder
    Commented Dec 22, 2013 at 14:18
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    This question needs tags such as india and capital gains as well as a lot of additional information such as whether the father was aged 65 in 1987 or 2011, whether there are records of how much was paid for the property in 1987, whether the zoning change was approved etc. Almost all real property transactions in India also involve substantial sums of money changing hands under the table, and so in the statement "he got all the amount by demand draft" the word all should be interpreted as all the money reported to the revenue authorities. Commented Dec 22, 2013 at 14:37
  • This question was flagged for closure. If it's clear that OP is in India, some editing would would make it a valid question, "how is a profitable sale of farm land taxed in India?" Of course I have no idea, but it's a question worth answering. Commented Dec 22, 2013 at 14:47

1 Answer 1


In short Yes, your father needs to pay tax. Please consult a CA so that he can advice you better.

In your father's case at the time of purchase it was agricultural land. However at the time of sale, it seems it was Urban, N.A. Land. A C.A. would advice you the exact exemptions and gains.

If it was agricultural land at the time of selling, the Section 54B: "Exemption from Capital Gains on transfer of Agricultural Lands in certain cases" would be applicable if your Dad was doing agricultural activity on this land, and after selling has purchased a similar land.

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