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Income from sale of land capital gain or business income


07 August 2016 I HAVE THIS QUERIS ON THIS TOPIC

1. ANY PERSON WHO SOLD ANCESTRAL LAND BY DIVIDING IN SMALL PLOT ,INCOME FROM THIS TRANSACTION HIS INCOME WILL COSIDER AS CAPITAL GAIN OR BUSINESS INCOME ?

2. AFTER SALE OF RURAL AGRICULTUER LAND BY PLOTTING INCOME WILL COSIDER AS BUSINESS INCOME OR CAPITAL GAIN OR FULLY EXMPTED INCOME BECAUSE RURAL AGRICULTURE LAND ARE NOT A CAPITAL ASSETS BUT IF IT WIIL SALE IN SMALL PLOT WHAT WILL IN THIS CONDITION

3. IF ANY IDIVISUAL ASESSE HAVE PURCHASE ANY LAND IN 2010-11 AND NOT TREAT IT AS STOCK IN TRADE IN HIS ACCONT BOOKS NOW HE WANT SALE HIS LAND BY PLOTTING ,WILL HIS INCOME CONSIDER AS CAPITAL GAIN OR IT WILL CONSIDER AS BUSINESS INCOME


07 August 2016 `Capital gain will arise on the date of conversion and business income will arise after the date of conversion.

07 August 2016 SIR PLEASE SOLVE THIS QUERY ALSO
WHAT IS ELIGIBILTY OF ASESSE TO COVERT LAND FROM CAPITAL ASSESTS TO STOCK IN TRADE

CAN INDIVISUAL ,WHO NOT HAVING ANY COLONIGER LICENCE CAN MAKE THIS CONVERSION?

CAN ASESSE SALE WHOLE LAND IN ONE PEACE AFTER CONVERSION IN STOCK IN TRADE WITH OUT PLOTTING ?

IF ASSESE MAKE PLOTTING AFTER CONVERSION AND MAKE 100 PLOT AND SALE 40 PLOT IN YEAR OF CONVERSION AND HOLD BALENCED 60 PLOT AS STOCK IN TRADE , WILL CAPITAL GAIN IMPOSE ON THESE 60 PLOT IN FUTURE ?




08 August 2016 1 No eligibility he can convert.
2 For conversion no licence is required for sale of converted plot approval required.
3 Yes he can do that.
4 Yes it will arise in future.

08 August 2016 THANKS A LOT SIR FOR SOLVE MY QUERY
ONE MORE QUERY SIR
CAN A ASESSE PURCHASE A NEW LAND AS BUSINESS STOCK AND HOLD IT AS STOCK IN TRADE FOR LONG TIME , AND NOT TREAT IT AS CAPITAL ASSETS?
IF YES IT MAY BE WAY TO SAVE CAPITAL GAIN , WHAT IS RULES IN INCOME TAX ACT TO AVOID THIS TYPE OF CAPITAL GAIN TAX EVASION ?

08 August 2016 No capital gain tax will be levied on asset held as business stock.

08 August 2016 SIR
THIS MAY BE WAY TO AVOID 20% CAPITAL GAIN

08 August 2016 AND LOWER % OF PROFIT WILL DECLEAR IN PGBP




08 August 2016 Normally business profit will be more attracting a tax at 30%. In your case if the profit is lower it is OK.

08 August 2016 SIR
IS THERE ANY RULE TO DECLER COMPULSORY MINIMUM % OF PROFIT IN LAND PROPERTY BUSINESS?

08 August 2016 No rule but when it goes to AO he will apply some percentage.

08 August 2016 OK SIR THANKS YOU HAVE CLEARED MANY DOUBT






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