capital gain

This query is : Resolved

paresh (Querist)
Follow

10 September 2009 Hello everybody.

I purchased agricutural land 4 years ago,this land is an urban area.
Now I am entering into an agreement with
developer for development of the land for residential flats. I bring the land in present value as per stamp valuation rate.(from investment into stock in trade). I receive the amount after complition of the project directly from the purchaser of the flat. How tax will be calculated? When I have to pay tax? at time of entering the agreemnet with developer or at the time of documentatio with the purchaser?

Pl anybody can advice me.

Thanks

Nischint Kumar Somani

Nischint Kumar Somani (Expert)
Follow

10 September 2009 if u have converted ur investment in stock in trade than than capital gain will be computed in the year in which such assets is converted in stock in trade, but it will taxable in the previous year in which considertation is received..accordingly u have to calculate ur capital gain tax.

Ratan Sharma

Ratan Sharma (Expert)
Follow

11 September 2009 Agree with expert. Tax is to be paid when the consideration received from purchaser and not at the time of agreement with developer.

Upgrade to CAclubindia Pro. Subscribe Now!