Capital Gain
This query is : Resolved
18 December 2010
If some one sell Agriculture land in the plots will it be eligible for exemption u/s 54B. If Yes then tell me the method to save tax
Further whether selling the land in plots will be treated as business income or capital gain.
Further whether selling the land in plots will be treated as business income or capital gain.
19 December 2010
Benefits of Section 54B will be available even if the agriculture land is sold in the form of plots provided in the two years immediately preceding the date on which the transfer took place, the land was being used by the assessee or a parent of his for agriculture purpose.
Section 54B is applicable when the capital gains arises from the transfer of a capital asset being land.Plots are also nothing but land and as such the only requirement for being used for agriculture purpose is in the context of past 2 years.
It will be beneficial to show capital gains as Section 54B benefit will be available even if plots are sold.
But, if the land is sold after conversion
in the forms of plots and it is converted into stock in trade then in the year of sale of the plot, both LTCG and business income will arise.
Section 54B is applicable when the capital gains arises from the transfer of a capital asset being land.Plots are also nothing but land and as such the only requirement for being used for agriculture purpose is in the context of past 2 years.
It will be beneficial to show capital gains as Section 54B benefit will be available even if plots are sold.
But, if the land is sold after conversion
in the forms of plots and it is converted into stock in trade then in the year of sale of the plot, both LTCG and business income will arise.
Message likes :
1 times
19 December 2010
If you put your land into plots and then sell that is what i understand from your query, then capital gain exemption is gone. Reg taxability whether as capital gain or business income will depend upon whether you have converted the land into stock in trade of your business or not. The best way can be to convert your agri land as it is into your business as conversion of capital asset and offer capital gain which is exempt. Then plot it and sell and offer as your business income
20 December 2010
Is there any relevant case law. If Yes can you please tell me
18 July 2024
There are several judicial precedents where the courts have examined whether the sale of agricultural land in plots should be treated as business income or capital gain. For instance, in cases like CIT vs. Chandra Narayan Sarkar [1981], it was held that merely dividing agricultural land into plots and selling them does not necessarily convert the transaction into a business activity.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- ITC temporary reversal and reclaim
- Inventory of finished goods
- Applicable TDS rate for sale of property in Nov 2024
- RCM INVOICING FROM NOV-2024
- Confusion around Form 26QB fields
- Sale of property furniture sale
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- Quiery in relation to GST liability in case of an advocate who has obtained GST registration.
- Can we claim ITC of Feb-2024 in the month of November-2024 which was not claimed by oversight
- TDS under section and rate of TDS
- GST input on scooter purchased
- TDS under section 194Q and TCS under section 206C
- GST input on car insurance and repairs
- GST input on Diwali gift to employee
- GST input on Mobile Handset
- Material and freight in same invoice
- TDS under section 194J inclusive of reimbursement of expenses
- TDS on Material and Labour in same invoice
- Should I be worried about and rectify reporting Jan,Feb ,March 2024 foreign salary in schedule FA?
Trending Online Classes
CAclubindia
