" ACCOUNTING TREATMENT & TAX LIABILITY REGARDING SALE OF INHERITED LAND WORTH OF RS 5 CRORE " My client is an advocate , during the financial year 2013-14 , he sold inherited rural land via sale deed due to some financial reasons & At present he is the owner of some land ( inherited as well as purchased 10-15 yrs before ) worth of Rs 10-15 crores & now for the first time he wants to file income tax return . Now I want to show all the immovable property ( i.e, land worth of Rs 10-15 crores ) in the balance sheet for the a.y 2014-15 , 1) Can i do that ? if yes, 2) then what should be the proper accounting treatment ? 3) And i don't want to show the above sale transaction occurred during the f.y 2013-2014 , Can i do that ? If yes, pls clarify , If No , then also clarify with provisions . CAN i stand that it is not a transfer as per capital gain ? if yes pls clarify ?
16 December 2014
Sale of rural agricultural land is exempted from tax. You should have deposited the sale value in the bank account so file return for financial year 2013-14. Your client being advocate will be earning taxable income, by clubbing agricultural income for rate purposes tax should have been paid and return filed during previous years.
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