Following major change has been proposed ,agreed and added in discussion on finance Bill 2013 in Lok Sabha on wealth Tax on agricultural Urban land. As per Finance Bill 2013 original proposal wealth Tax on urban Agriculture land is applicable subject to following conditions.

The urban land is not chargeable to wealth-tax if it is a land;

  1. On which construction of a building is not permissible under any law for the time being in force in the area in which such land is situated; or
  2. occupied by any building which has been constructed with the approval of the appropriate authority; or
  3. being an unused land held by the assessee for industrial purposes for a period of two years from the date of its acquisition by him; or
  4. held by the assessee as stock-in-trade for a period of 10 years from the date of its acquisition by him.

However at the time of approval of finance Bill 2013 in Lok Sabha the above condition has been changed as under

Land classified as agricultural land in the records of the Government and used for agricultural purposes, will not be treated as an ‘asset’ under Section 2(ea) with retrospective effect from the AY 1993-94.

Consequently, such land will not be chargeable to wealth-tax, even if such land is situated in an urban area.

As per the amended provision, following lands will not be chargeable to wealth-tax:

  1. Land classified as agricultural land in the records of the Government and used for agricultural purposes; or
  2. Land on which construction of a building is not permissible under any law for the time being in force in the area in which such land is situated; or
  3. Land occupied by any building which has been constructed with the approval of the appropriate authority; or
  4. An unused land held by the assessee for industrial purposes for a period of two years from the date of its acquisition by him; or
  5. Land held by the assessee as stock-in-trade for a period of 10 years from the date of its acquisition by him.
Change in Finance Bill 2013: No Wealth-Tax on Agriculture Land

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