Capital gains tax exemption to benefit over 24,000 farmers in Amaravati

Exemption is given to those who had contributed to land pooling for the Amaravati construction

More than 24,000 farmers in Krishna and Guntur districts will benefit from capital gains tax exemption announced on Wednesday by Union Finance Minister Arun Jaitley in Budget 2017.

The exemption is given to those who had contributed to land pooling for the sake of Andhra Pradesh's new capital construction, Amaravati.

Last year, the state government had acquired close to 34,000 acres of land under the land pooling scheme from land owners across 29 villages in the two districts with a promise to give them back the developed housing and commercial plots within the core capital area.

If any of them choose to sell these plots to other persons they need not pay 30 per cent capital gains tax to the government on that income, according to the announcement made in the Budget speech. This comes as a goodwill gesture from the Centre as the farmers and politicians from this region and the state government had requested the Centre on the tax exemption in the past.

Farmers who had parted with their land under the pooling scheme were offered a 1000 square-yard residential and 250 square-yard commercial plot per acre in case of uplands, and 1000 square-yard residential plot and 450 square-yard commercial plot per acre in case of the fertile land. Most of these farmers were given the entitlement certificates for these plots based on the layout plan.

Farmers' land and the government land put together, more than 54,000 acres of land is currently in the hands of AP Capital Region Development Authority (APCRDA), the state government nodal agency created for the development of the proposed capital city.

The land prices had shot up in this rich region soon after the declaration of capital city location, which falls between Vijayawada and Guntur cities.