Distance is measured from the border line of city, town or district. You need not pay a lump sum tax of 20 per cent on sale value. No tax is payable on agricultural land. Agricultural land is exempted from all taxes under Income Tax Act.

Any Agriculture land which is within the: In the municipal limits or within the limits of Nagar Palika is an urban agriculture land and is taxable. Within such two, six or eight Kilometres of the Municipal or Nagar Palika area is an Urban Agriculture land and is taxable.

2)The most important change done w.e.f. 01.04.2013 is that the distance is now to be measured aerially. Prior to the amendment the road distance was to be taken. As a result of this Arial measurement, much more land may be part of urban agriculture land

3)

• If you sell an agricultural land and make capital gains, you can re-invest such gains in acquiring another agricultural land. You have to buy another agricultural land within 2 years.
• This deduction is available only if you/your parents have been using the agricultural land for a period of two years prior to date of transfer (sale).

   

• The new agricultural land that is acquired should be held by you for atleast 3 years from the date of purchase.

Your CA is correct as it is within 8 kms of muncipal corporation of Jalandhar and on sale you have to pay capital gains tax 

This is amendment is as per Finance Bill, 2013. 

Amendment in the definition of Capital Asset

The existing provisions contained in clause (14) of section 2 of the Income-tax Act define the term “capital asset” as property
of any kind held by an assessee, whether or not connected with his business or profession. Certain categories of properties
including agricultural land have been excluded from this definition. Sub-clause (iii) of clause (14) of section 2 provides that (a)
agricultural land situated in any area within the jurisdiction of a municipality or cantonment board having population of not less
than ten thousand according to last preceding census, or (b) agricultural land situated in any area within such distance not
exceeding eight kilometers from the local limits of any municipality or cantonment board, as notified by the Central Government
having regard to the extent and scope of urbanization and other relevant factors, forms part of capital asset.
It is proposed to amend item (b) of sub-clause (iii) of clause (14) of section 2 so as to provide that the land situated in any
area within the distance, measured aerially (shortest aerial distance), (I) not being more than two kilometers, from the local limits
of any municipality or cantonment board referred to in item (a) and which has a population of more than ten thousand but not
exceeding one lakh; or (II) not being more than six kilometers, from the local limits of any municipality or cantonment board referred
to in item (a) and which has a population of more than one lakh but not exceeding ten lakh; or (III) not being more than eight
kilometers, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of
more than ten lakh, shall form part of capital asset.
It is also proposed to define the expression “population” to mean population according to the last preceding census of which
the relevant figures have been published before the first day of the previous year.
Similar amendments are also proposed in clause (1A) of section 2 of the Income-tax Act, 1961 relating to the definition of
“agricultural income” and in respect of the definition of “urban land” in the Wealth-tax Act, 1957.
This amendment took effect from 1st April, 2014 and will, accordingly, apply in relation to the assessment year
2014-15 and subsequent assessment years.

Urban Agricultural land: Urban agricultural is a land located in specified location and used for agricultural purposes. upto 8 kms,from local limits of municipality and which has a population of more than 10,00,000. If the distance is more than 8 kms then it can be termed as rural land, 

If the agriculture land is covered under such area it shall be an urban agriculture land and will become taxable. If the land is outside the area specified in the said notification, the land shall be rural agriculture land and shall not be taxable. Here, the land distance is to be considered as road distance

It is taken into consideration in any area within the distance not being more than eight kilometres, from the local limits of any municipality that the agricultural land comes under urban, hence 20% long term capital gains would be attracted. 

to be a rural agriculture land, a land has to qualify both the below mentioned conditions. 1. The land should be Out of the Municipality or Nagar Palika. 2. The land should be aerially out of: 2 Kms in case of nearest Municipality or Nagar Palika having population of more than 10000 but not exceeding 100000/- 6 Kms in case of nearest Municipality or Nagar Palika having population of more than 1,00,000 but not exceeding 10,00,000/- 8 Kms in case of nearest Municipality or Nagar Palika having population of more than10,00,000/- The most important change done w.e.f. 01.04.2013 is that the distance is now to be measured aerially. Prior to the amendment the road distance was to be taken. As a result of this Arial measurement, much more land may be part of urban agriculture land. In other words, Any Agriculture land which is within the: In the municipal limits or within the limits of Nagar Palika is an urban agriculture land and is taxable. Within such two, six or eight Kilometres of the Municipal or Nagar Palika area is an Urban Agriculture land and is taxable.

Yes you need to pay the said tax as per applicable regulations