Accounting of sale of land

Jyothis (Article) (1127 Points)

13 April 2016

A P.ltd company sold a piece of Land for 40 lacs in Mar,3,2016,Land was purchased in 2008 for Rs.15 lacs.

How same needs to be accounted & is any entry to be passed by company regarding its taxability.

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5 Replies

CA Narender Lamba (ACA) (109 Points)
Replied 13 April 2016

profit of 25 lacs transfer to profit and loss account

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Ruchi (CA) (1410 Points)
Replied 14 April 2016

Yes, the profit should be transferred to P&L a/c. There is no need to pass any separate entry on its taxability.

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Gopinath (student ) (28 Points)
Replied 14 April 2016

Yes , the entry for sale of land ..
cash a/c. Dr 40Lacks
to land a/c Cr 15lacks
to p&l a/c. Cr 25lacks

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Vishal Goel (Chartered Accountant) (1693 Points)
Replied 28 April 2016

Agree with Gopinath
but do not accept cash for property transaction.

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Jyothis (Article) (1127 Points)
Replied 28 April 2016

What's issue in receipt in cash.

There is no disallowance u/s 40(A)3 for Fixed Asset purchase.

Please mention,is there any other issue here.

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