23 September 2016
Sir,,, A land purchased in 1980s ,which is used for business purpose had sold now..... What is the tax treatment of that sale.. either taxable under Capital gain or PGBP????
23 September 2016
Sir, till last year that land was accounted as an asset of proprietorship, so what is the treatment under PGBP??? Isn't the sale of land and profit on such sale needed to show under PGBP???
23 September 2016
No..... tell me...Is it the business of the proprietor to purchase and sell of lands?... if yes, then it can be treated as income from business
23 September 2016
so it will be taxed under capital gain. If his is business of selling and purchasing of land, in that case it could have been taxed under income from profit and gains of business. Ok?
23 September 2016
No, it is not like that.....tell me the figure at which land is appearing in your balance sheet and the amount at which it is sold... then i can explain the journal entry
23 September 2016
debit bank 3Cr credit land 80 lac credit profit on sale of land 2.20Cr (Being sale of land for a price of 3 Cr) Please note the profit on sale of land will be transferred to Profit and Loss account. Your query please?
23 September 2016
No... you need to find out INDEXED cost of acquisition of land, in order to find out the long term capital gain Remeber one thing once and for all..... income tax computation may be SEPARATE from books of accounts
23 September 2016
K , thank you sir, so we need eliminate that profit element from to arrive at PGBP,. And need to compute income from Capital gain using indexation method ... isn't it????