Jignesh (Service) (42 Points)
31 May 2010Dear All,
We had a factory land in Navi Mumbai, which was acquired in 1997. the cost of the land was Rs. 1 Cr. and then the factory building was build at the cost of Rs. 90 L.
It depriciated value os Rs. 45L.
Today if we sale the land & building will the profit be taxable and if we reinvest the entire amount in another factory plot & building will it be taxable.
Please guide me appropriately.
Regards
Jignesh Patel
Amir
(Learner)
(4016 Points)
Replied 02 June 2010
Dear Jignesh,
The sale consideration is required to be split between two parts. One pertaing to Land & Other pertaing to Building. {Certificate from Govt. approved or registered valuer will do}
The "Building portion" of sale consideration will be reduced from the Block in terms of Sec 50.If Closing WDV is positive & there are other asset in the Block then no treatment under capital gain is required to be done. Otherwise Capital gains will arise nevertheless the same can be claimed exempt u/s 54EC.
The "land portion" of sale consideration will be dealth with Sec 48. (Benefit of Indexation of cost shall be allowed) - Any gain can be claimed exempt u/s 54EC
MAXIMUM AMOUNT THAT CAN BE CLAIMED U/S 54EC IN ANY FY IS 50 LACS BY MAKING INVESTMENT IN THE REC / NHAI BONDS.
kantijain
(Chartered Accountant in Practice)
(385 Points)
Replied 02 June 2010
Dear Jignesh,
I agree with amir view, only addition i will like to make is that in case there is no other building than the excess of sale consideration over wdv will be treated as short term capital gain u/s 50. Also there is a mechanism wherein if the sale is within 6 months of the end of the financial year than the exemption u/s 54EC can be claimed upto Rs. 1 Crore by investing twice Rs.50 Lac in 2 different financial year, i hope u got my point or else contact any professional CA to help u out.
Regards
Kanti jain
ABID Maredia
(T)
(33 Points)
Replied 24 November 2018
What would be the case if assessee is a PVT Ltd Company? What options are available to tax Tax?
Assessee is a PVT Ltd Company. It has land & building in Tamilnadu. It is winding up the operations in Tamilnadu & transferring all the assets to a new PVT Ltd Company in Gujarat doing the same business. Shareholding pattern is same in both the companies. There is a capital gain on transfer of land & building. What is the way to reduce tax liabilitiy?
Nikhil Kaushik
(Fellow CA)
(85761 Points)
Replied 24 November 2018
| Originally posted by : ABID Maredia | ||
 |
What would be the case if assessee is a PVT Ltd Company? What options are available to tax Tax? Assessee is a PVT Ltd Company. It has land & building in Tamilnadu. It is winding up the operations in Tamilnadu & transferring all the assets to a new PVT Ltd Company in Gujarat doing the same business. Shareholding pattern is same in both the companies. There is a capital gain on transfer of land & building. What is the way to reduce tax liabilitiy? |
 |
ideally you should merge the the companies for avoiding any taxation except for stamp duties.
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