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?
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.
CAclubindia
