Indudhar (Tax Advocate) (427 Points)
20 June 2009Dear Friends,
how is the taxation of Real Estate business of a firm Computed?
whether capital gains applicable or not?
whether it is considered as a business?
please guide me fellas..
thanx in anticipation.
Piyush Jain
(CA)
(283 Points)
Replied 20 June 2009
Indudhar, firm is just another assessee. All the provision of income tax will apply accordingly.
If they are holding property as investment. than their will be cap gain, otherwise PGBP.
Any rene received from property will be taxable under PGBP.
Hope it will help.
Regards
Piyush
Prem Kumar
(Articled student--Final)
(375 Points)
Replied 24 June 2009
If the nature of firms busniess is real estate the it will be treated as Income form business and not from capital gains. But the partner whos the land belongs should pay capital gain tax when such transfer( to outsider but not firm) takes place. Refer sec 45(2) and 45(3) conversion of captial asset into stock in trade.
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