Union Budget 2017: TDP and Amaravati area farmers ecstatic over capital gains tax exemptions
Farmers in the Andhra Pradesh Capital Region who pooled their farm lands for construction of capital city Amaravati heaved a sigh of relief as Union Finance Minister Arun Jaitley announced exemption of capital gains tax. More than 20,000 farmers who gave up their land under the Land Pooling Scheme (LPS) will benefit from this. Depending on the commercial market value of the developed plots that AP Government will give the farmers back, farmers having plots of 1,000 sq yards or more stand to benefit Rs 10 lakhs to Rs 30 lakhs in tax exemptions. The AP Government through the AP Capital Region Development Authority has pooled 33,000 acres from the farmers to construct the new capital. Thanking Jaitley for giving the capital tax exemption to capital farmers, Chief Minister N Chandrababu Naidu said the budget will steer the nation in the right fiscal direction, and that growth-specific spending will boost infrastructure and employment generation.
Last October, after laying the foundation stone for the Andhra Pradesh Administrative Complex at Lingayapalem village in the Amaravati capital region, Jaitley had hinted to farmers that the Centre was considering exemption of capital gains tax for them. “Those whose land was used as land pool for development of Andhra Pradesh’s new capital have been exempted from capital gains,” said Arun Jaitley.
“Capital gains tax holding period down to 2 years from 3 years.”
This exemption is applicable on those holding lands on June 2, 2014, when Andhra Pradesh was officially bifurcated and separate states of AP and Telangana came into existence. The value of land in the capital region has escalated to over Rs 2 crores per acre in the last two years and farmers who sell land have been paying huge amounts in taxes.
This AP-specific announcement drew cheers from the TDP Government.
“Capital gains tax exemption for farmers who pooled land to build new Capital Amaravati is a great recognition of their spirit. It shows how significant AP is to the Central Government. My special thanks to Finance Minister Arun Jaitley on behalf of farmers of AP,’’ Union Minister and TDP Rajya Sabha MP Y S Choudhary said today.
Chief Minister N Chandrababu Naidu had been requesting the Centre to give the tax exemption to capital farmer considering that they voluntarily gave their prime agricultural land for the construction of the AP capital. Naidu had written several letters to Prime Minister Narendra Modi and Union Finance Minister Arun Jaitley urging them to consider the request. As per the LPS, for every acre of irrigated land given by a farmer, the government would return a 1,000 square yard residential and a 450 sq yard commercial plot, while every acre of dry land, it is a 1,000 sq yard residential and a 250 sq yard commercial plot.