Capital contribution of land by incoming or taking on rent
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
25 February 2012
A & S are partners of a poultry farm,VEF.Now for expansion,they need around 15 acres of land.
Spouses of A & S OWN 10 & 14 acres of agrl.land adjacent to poultry farm.
option I
taking spouses of A&S AS PARTNERS WHO BRING their land as capital contribution.
option 2
Taking spouse's land on lease and paying them rent for their land.
kindly advise me which option is better from tax planning and inform me any problems from Assessing officers during scrutiny assessments.i know the problem of TDS which will be taken care of.
Spouses of A & S OWN 10 & 14 acres of agrl.land adjacent to poultry farm.
option I
taking spouses of A&S AS PARTNERS WHO BRING their land as capital contribution.
option 2
Taking spouse's land on lease and paying them rent for their land.
kindly advise me which option is better from tax planning and inform me any problems from Assessing officers during scrutiny assessments.i know the problem of TDS which will be taken care of.
26 February 2012
I do not know, whether poultry farm can be developed on the agriculture land only.
.
However, Mrs. A and Mrs. S are more happy while enjoying the tax free agriculture income. It is not prudent if they lose higher tax free income for the smaller share in taxable income / or just for taxable lease rentals.
.
It is not advisable to surrender permanent
interest in land. The partnerships are entered into for breaking them.
.
Nowadays, Substantial Income can also be raised from Agriculture Produces, like vegetables, Oil Seeds, Pulses, Garlic or other cash crops.
.
So, in spite of expanding poultry farming,
business in adjacent land, another option -- to convert poultry farm land into agriculture land may also be considered.
.
I do not know, whether poultry farm can be developed on the agriculture land only.
.
However, Mrs. A and Mrs. S are more happy while enjoying the tax free agriculture income. It is not prudent if they lose higher tax free income for the smaller share in taxable income / or just for taxable lease rentals.
.
It is not advisable to surrender permanent
interest in land. The partnerships are entered into for breaking them.
.
Nowadays, Substantial Income can also be raised from Agriculture Produces, like vegetables, Oil Seeds, Pulses, Garlic or other cash crops.
.
So, in spite of expanding poultry farming,
business in adjacent land, another option -- to convert poultry farm land into agriculture land may also be considered.
.
Message likes :
1 times
03 April 2012
The expert has correctly answered I agree with him and no extra comment is required.
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