Q560. Transfered agricultural land

to non agricultural land and selling

Question: Hello Sir, I have purchased agriculture land in year 2000 for Rs 4000 and then in 2011 I have transferred from agriculture land to non agriculture land and now I am planning to sell the land. what is best option either straight sell or give a contract to developer to develop and sell the building to 3 or 4 party? what will be effect on tax liabilities? Best regards and many thanks in advance. Peter S. Answer: Depending on where the land is located and property values of the area, you could go with either of the options you mentioned. Generally, getting the building constructed and then selling should be more profitable, but this will probably require you to fund the project first. If your land is located in an area where their is scarcity of good land, you may be able to find a developer to build and finance building on your land. These days in most metropolitan cities where land is not easy to find for new construction, some home owners are opting to sell their homes to builders and still continue to have part ownership of their property. In such a scenario, the builder would pay a negotiated sum of money to the home owner, replace the current house by building a multi-story building and give the owner perhaps one flat depending on their agreement and sell the rest. In such cases the entire funding of the project is done by the builder. I can’t imagine how much land you were able to buy for Rs. 4000, in the year 2000. If you had the land usage converted from agricultural to non-agricultural, depending on where the land is located there may be restrictions on selling the land without any construction or for a specific period after the conversion becomes effective. You should check all documentation relating to the land and conversion. To get an idea on the tax liabilities you need to provide more information such as the full cost of acquisition of the land, the amount spent on conversion of land and an idea of what the land is worth now. Property brokers may be able to give you an idea of what your land is currently worth.