Income Tax

Tax queries 489 views 6 replies

x and y purchased land in their joint name and given contract  for construction of 6 flats. 3 flats were completed and sold during financial the year 2009-10 and three flats will be completed during 10-11. 
Can X and Y show their Income tax  as partnership Income from business for Fin.yr09-10 & 10-11 ?

Replies (6)

Dear someone,

X and y have to declare his income as capital gane seperately if both has has purchase this land in the specified ratio for which they sold. or the person is liable for capital gain income who is the position holder of this land and the same solded land should be declae in a.y. 2010-11.

Thanks. 

Thanks

They have entered into a partnership agreement after the purchase of land and agreed to share the profit and loss arising from the business and taken the share contributed for purchase of land as their capital and plan to do same business in preceding years also. please explain why is this not possible?

Originally posted by : obeid

Thanks

They have entered into a partnership agreement after the purchase of land and agreed to share the profit and loss arising from the business and taken the share contributed for purchase of land as their capital and plan to do same business in preceding years also. please explain why is this not possible?

  Probably you mean "succeeding years"?    It then becomes their business and will be charged as business income.  LTCG is for one off transactions.

Thanks sir, 

1)  Is it possible to avoid LTCG for this transaction as well and show as business income?

2) can the property to  be purchased in firms name only or in joint names of partners?

IF EMPLOYER GIVE LOAN TO EMPLOYEE  FOR HOUSE . THEN WHAT WILL THE EFFECTS ? WILL TDS CUT ON LOAN ? WILL TDS CUT ON INTEREST ON LOAN ? WILL IS IT PERQUISITES ?

Since you are going to do this on a regular basis, you can show it as business income. 

A firm cannot hold property since it is not a legal entity.  All transactions will be in the name of the partners acting on behalf of the firm.  Once the firm is constituted, it is better to transact in the name of the firm, since the partners cannot year after year put their individual properties in the firm.


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