Tax on Trees

Dear Pankaj,

I have agricultural land which has many fruit and timber trees, all planted by me. Though agricultural as per revenue records, being within 8 Km. of the Muncipal limits and located in a village with population greater than 10,000, it does not qualify as agricultural land as per IT Rules. Can I sell the trees and land separately thereby paying only the LTCG on the land and no tax on the realisation of trees? If yes, how can I value the trees? I am not a CA. I have found case law "Kerala High Court; Commissioner Of Income-Tax vs Alanickal Co. Ltd. on 21 January, 1986 (Equivalent citations: 1986 158 ITR 630 Ker) where land was sold along with rubber trees. But the IT taxed the rubber trees separately. The HC court decided in favour of the respondant. It is understood that the trees must be cut and sold for them to be considered separately. In my case the timber trees are still young to be cut.

asked Feb 03 '12 at 14:52 by Harish 11

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Asked: Feb 03 '12 at 14:52

Seen: 1,317 times

Last updated: Feb 03 '12 at 14:52

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