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Transfer of Land to a company by one of the Director of the Company

06 April 2023

please let me know... A director purchased land on his own name by Value Rs 30 Lakhs... after 8 months He transfered that land to company by Share Consideration Rs 55 lakhs paying stamp duty and TDS.

please suggest me whether capital gain Short term Capital gain shall attract or not...

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2 Replies

Radhey Shyam Jha (Student) (1621 Points)
Replied 07 April 2023

Yes capital gain is application as STCG with indexation benefit

Roodita Gaikwad (Practice) (4654 Points)
Replied 22 April 2025

If a director purchases land in his own name and later transfers it to the company at a higher value (in this case, Rs 55 lakhs), the tax treatment depends on the holding period and the nature of the asset.

Short-Term Capital Gain (STCG) would typically apply if the land is sold within 36 months of acquisition. Since the director transferred the land after 8 months, it will be treated as a short-term capital gain.
The difference between the sale price (Rs 55 lakhs) and the purchase price (Rs 30 lakhs) will be subject to capital gains tax.
Since the director transferred the property to the company, the company may also need to evaluate its tax position, and TDS has already been paid, which is in accordance with the applicable tax provisions.

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