Cash deposit from sale of asset in diff fys

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 September 2013 Sir,
In FY 2011-12 agreement to sell piece of vacant land entered and Booking amt of 3 lac received in cash and deposited in bank a/c. Sale deed registered in FY 2012-13 rest of money received in cash and deposited in bank a/c. Will the cash deposited in FY 2011-12 taxed separately in AY 2012-13 and the full consideration amount be deemed to have been received in FY2012-13 and taxed in AY 2013-14? I hope the tax authorities accept the cash deposit made in FY 2011-12 as part sales consideration and not tax it separately.
What is your opinion?
Pl reply soon
Thanks

Rupesh Jain

Rupesh Jain (Expert)
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20 September 2013 it is taxable in year in which you recd cash .

Querist : Anonymous

Querist : Anonymous (Querist)

20 September 2013 Dear Rupesh Sir
You mean to say that if agreement to sell is in FY2011-12 and part consideration received in FY 2011-12 and subsequently rest consideration received in FY2012-13 and registry of sale deed also took place in FY 2012-13 followed by possession by buyer then I have to pay Capital gains tax in FY 2011-12 and not Fy 2012-13???Please reply soon

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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18 July 2024 Based on the scenario you've described regarding the sale of vacant land and the timing of payments and registration, here are the key points to consider for tax implications:

### Scenario 1: Agreement to Sell in FY 2011-12, Registration and Payments

1. **Agreement to Sell (FY 2011-12)**:
- An agreement to sell the piece of vacant land was entered into in FY 2011-12.

2. **Booking Amount Received (FY 2011-12)**:
- Rs. 3 lakh was received as booking amount in cash during FY 2011-12 and deposited into the bank account.

3. **Rest of Consideration Received (FY 2012-13)**:
- The remaining consideration was received in cash during FY 2012-13 and subsequently deposited into the bank account.

4. **Registration of Sale Deed (FY 2012-13)**:
- The sale deed was registered in FY 2012-13.

### Tax Implications:

- **Capital Gains Taxation**:
- Capital gains arising from the sale of land are taxable in the year of transfer. In this case, the transfer is considered to have occurred when the sale deed was registered in FY 2012-13.
- Therefore, the capital gains arising from this transaction would be taxable in FY 2012-13 (Assessment Year 2013-14), not in FY 2011-12.

- **Consideration Received**:
- For tax purposes, the entire consideration received for the sale of land, including the booking amount received in FY 2011-12 and the rest received in FY 2012-13, is considered as part of the sale proceeds.
- The cash deposits made in FY 2011-12 and FY 2012-13 should be accounted for in your income tax return for the relevant assessment years.

- **Cash Deposits in FY 2011-12**:
- The Rs. 3 lakh received as booking amount in FY 2011-12 and deposited into the bank account should be part of the total consideration for the sale of land.
- While the booking amount itself is not separately taxable, it forms part of the total sale consideration that determines the capital gains tax liability when the land is eventually sold.

### Conclusion:

- **Capital Gains Tax Liability**: Since the sale deed was registered and possession was given in FY 2012-13, the capital gains arising from the sale of the land will be taxable in FY 2012-13 (Assessment Year 2013-14).
- **Booking Amount**: The booking amount received in FY 2011-12 is part of the sale consideration and should be included when calculating the total capital gains from the transaction.

It's essential to maintain proper documentation of the agreement to sell, payment receipts, and bank transactions to support the tax treatment in your income tax returns. If there are any specific tax regulations or local laws applicable to your jurisdiction, it's advisable to consult a tax professional or chartered accountant for detailed guidance tailored to your situation.