Capital gain in case of wip

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abhishek shah (Querist)
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29 January 2016 Respected Sir,
I Purchase Shop Few Years Ago & Treated Such Shop As WIP, But After Few Year I Sell The Shop As It Is Without In Redevelopment Than I Should Have To Pay Capital Gain In Such Case Or Not????

CA CMA CS Ram Pavan Kumar Melam

CA CMA CS Ram Pavan Kumar Melam (Expert)
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29 January 2016 Yes, you have treated the shop as stock in trade u/s 45(2) of the Income Tax Act. It attracts capital gain on such treatment itself. The taxability of capital gain arises, when you actually sell the property.

Hence, in your case, both capital gains / (loss) and business income / (loss) needs to be computed in the year of sale of shop.

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