Land transfer into stock in trade

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 August 2013 Dear all,

I have purchased a land in the f.y. 2007-08 and now in the f.y. 2013-14 , I want to make
flats on that land , and want to transfer land into stock in trade ,

Please assist me regarding capital gain tax, that what will be tax , and how should I treat this case.

Thanks

Subhash Jain

CA UMESH DULAL

CA UMESH DULAL (Expert)
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10 August 2013 Conversion of assets into stock in trade is treated as transfer so may attract capital gain.

If it is other than agriculture land, then it is capital assets, hence your transaction will attract capital gain.

For the purpose of capital gain, fair market value of the land is treated as Full Value of Consideration.

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Querist : Anonymous

Querist : Anonymous (Querist)

10 August 2013 Thanks Umesh for reply ,

If I make a agreement with developer to build flats on my land , in terms of my investment is land and developer will bear construction cost , and at the time of sale of flats , I will take the amount in proportion of land amount and profit.

what should be tax treatment.

Thanks in anticipation
Subhash Jain

CA UMESH DULAL

CA UMESH DULAL (Expert)
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10 August 2013 details of term of agreement is needed to go to conclusion in your case.

What type of agreement with developer, terms of agreement, payment(i.e. your consideration) out of agreement etc is needed.

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