Changing Company Constitution

478 views 4 replies

Private Limited company sells a land how is Long Term Capital Gain tax be applied?

1 - Does the Private Limited Company pay tax on Long Term Capital Gain?

2- After the sale of land when the private company distributes the remaining to shareholders , are they taxed again for the Capital Gain in Share Price?

Please advise on best way to minimize tax liability.

Thank you!

 

 

Replies (4)

1. Yes 

2. Dividend distributed to shareholders is taxable. 

Advise depends on many factors like is it still running business etc. 

Thank you Lekshmi. To understand this better - are we saying the shareholders will be subject to double taxation?

As an example if lets say the LTCG for sale of property is 1 crore, The Private Limited pays lets say 20 Lacs tax on this and decides to distribute the remaining 80 Lacs to shareholders (let us assume single shareholder with 100% shares). The cost of shares to the shareholder was at Rs 10 face value. Does it mean that the shareholders will end up paying now additional capital gain tax on the 80 lacs?  Please advise.

No capital gain will be chargeable to them, as the company will share the profit to their shareholder, the income they gain on that basis they will have to pay tax.

So in above example I provided are you saying that the Company will pay 20 Lacs tax and shareholder will pay tax on remaining 80 Lacs distributed as dividend as per the Income Tax slabs? Won't will be huge taxation on both sides?

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 30 June 2026
Article Assistant or Paid Assistant

VIKAS VERMA & CO

New Delhi

Others

View Details
Company
20 June 2026
Assistant Accounts Manager

Fintax Professionals

Gurgaon

CA Inter

View Details
Company
ARTICLESHIP 09 June 2026
Article Trainee

Numbertree LLP

Mumbai

CA Inter

View Details
Company
20 June 2026
Chartered Accountant

ANV & Company

New Delhi

CA

View Details
Company
ARTICLESHIP 30 June 2026
Taxation Content Writer Intern

Interactive Media Pvt Ltd.

New Delhi

CA Inter

View Details
Company
25 June 2026
Accounts & Taxation Executive

Dindukurthy & Associates

Hyderabad

MBA

View Details
Company
24 June 2026
Senior Account (VA Client Operations)

Karbon Business

Bengaluru

CA Inter

View Details
Company
22 June 2026
Finance Manager- Chartered Accountant

Triveni Turbine Limited

Bengaluru

CA

View Details