Capital gains
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
12 April 2013
My relative is having some acres of agricultural land both from purchase and inherited. Last year he converted part of those lands into plotting and entered into real estate business. he showed all his sale receipts as business income and paid tax on that. Is it correct or the income on sale of land should be shown under capital gains. He is presently doing real estate business.
12 April 2013
I.e means he converted land which is held as investment into stock in trade. So market value on the date of conversion shall be considered as the sale value of land and has to arrive capital gain on the date of conversion as well as such value shall be considered in the books of business as purchases value or stock of land.
So you have to arrive capital gain on the date of conversion of land and the capital gain tax shall be paid at the time of actual sale.
OM SAI SRI SAI JAI JAI SAI
So you have to arrive capital gain on the date of conversion of land and the capital gain tax shall be paid at the time of actual sale.
OM SAI SRI SAI JAI JAI SAI
12 April 2013
However for agricultural land there is exemption to capital gain tax. So if the conditions to claim such capital gain tax satisfied such agricultural land then you need not to pay capital gain tax.
OM SAI SRI SAI JAI JAI SAI
OM SAI SRI SAI JAI JAI SAI
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