Land as capital contribution (Income Tax)

This query is : Resolved

Author : Anonymous

( Author )
04 February 2013

Hello Friends, I have a land registered in my name. Now I am looking forward for registering a Private Limited Company. Can I introduce land as capital. What is the procedure to do that. Will I be required to get the property regstered in name of the company, i am not too keen for this option as it will attract registration charges of of about 2% of land value. Or do I have to execute a transfer deed kind of thing in name of the comapany ? I really need help. Thanks in advance

CA PARAS BAFNA

( Expert )
04 February 2013

FIRST DECIDE WHETHER YOU WANT TO KEEP LAND IN YOUR NAME OR IN COMPANY'S NAME.
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THE LAND CAN BE TRANSFERRED TO THE COMPANY BY PAYING THE APPLICABLE STAMP DUTY.
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FURTHER YOU WILL BE LIABLE TO CAPITAL GAINS TAX ACCORDING TO SECTION 50C.
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2% IS NOT A MUCH HIGHER RATE- LOOKING TO THE BENEFITS OF A LAND IN THE PVT LTD CO.
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WHEN YOU WANT TO SALE THE LAND WITH THE COMPANY- IT CAN BE DONE BY JUST TRANSFERRING YOUR SHARES TO THE BUYER.
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