14 July 2011
The land is a capital assets and as it has been converted into non agriculture the identity has not been changed.
If you sale the land by plotting still it is your capital asset and the profit on the sale of land exceeding 36 month is entitled to claim indexation benefit.
In no case the profit on sale of land is a business income. You can use 54EC provisions to save tax if you feel so.
16 July 2011
I agree with Shri Agarwal. 54EC could be the best way to save tax in such deals (thereby removing any tax implications irrespective of it being business income or not)
You may mail to saurabh@nidhiinvestments.com in case of further doubt.
Querist :
Anonymous
Querist :
Anonymous
(Querist)
18 July 2011
WHAT WILL BE THE TAX IMPLICATION WHEN THE SAME CAPITAL ASSET IS CONVERTED TO STOCK IN TRADE BY PASSING AN ENTRY STOCK A/C DR ASSET A/C CR CAN IT BE THEN SAID THAT TILL THE POINT OF CONVERSION IT IS CAPITAL ASSET AND THEREFORE CAPITAL GAIN AND THEN BUSINESS INCOME.