Roopeshkumar L (Artical) (142 Points)
08 August 2012Hi All.........
Incase of capital Gain incase of "Capital assets Converted in to stock in trade"
One of my Client had own land, then he had converted in to Sites in that land and he had some sites.
now he is liable to pay capital gain but how to calculate the CG & Business Income..............................?
The value to be as proprinate to the Site portion of the Total Land......................?
Manjunath
(Audit assistant)
(48 Points)
Replied 08 August 2012
On the date of Aquisition to the date os coversion capital asset.on the date of conversion will became stock in trade.
Capital gain = Take FMV on the date of conversion as sale considaration for capital gain(cost of aquisition - FMV)
Business income = (FMV on the date of conversion - actual sale value.)
Roopeshkumar L
(Artical)
(142 Points)
Replied 09 August 2012
tat correct sir,
but in this case in total land much more sites are still pending for sale.................?
Q1. wat is the cost for such sites.......................?
Q2. we have to proporinately on site portion ................................. ?
Manjunath
(Audit assistant)
(48 Points)
Replied 09 August 2012
PAY CG tax only on sold part,unsold land cpaital gain shall be paid when it is sold.(Proporinate calcultion)
TRIYAMBAK PATRO
(IPCC STUDENT)
(71 Points)
Replied 11 August 2012
WHEN CAPITAL ASSET IS CONVERTED INTO SIT, IN THAT P.Y IT IS REGARDED AS TRANSFER BUT CAPITAL GAIN WILL ARISE IN THE YEAR WHEN CONVERTED CAPITAL ASSET IS SOLD.METHOD FOR CALSULATION IS:
FOR CAPITAL GAIN
CONSIDERATION PRICE: MARKET VALUE ON THE DATE OF TRANSFER
LESS:COA/INDEXED COA
LESS:COI/INDEXED COI
----------------------------------------
CAPITAL GAIN(SHORT OR LONG TERM AS THE CASE MAY BE)
FOR BUSINESS INCOME:
SALE PRICE - MARKET VALUE AS ON DATE OF TRANSFER= BUSINESS INCOME OR LOSS AS THE CASE MAY BE.
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