Advance tax
This query is : Resolved
Rakesh B. Surve
(Querist)
11 September 2014
sir
I am in construction business.
I developed ancesteral land and construct residential complex. and sold some flats.
in that case how to calculate advance tax?
May I have to consider both aspects like land cost and business profit on flat sale for advance tax working.
plz guide me.
11 September 2014
Exactly Yes.
You have to consider both land and building cost for calculation of Advance tax .
Fair market value of land shall be taken as your cost of land for calculation purposes .
Fair market value shall be taken on the date when you convert the land from capital assets to stock in trade.
On conversion date you required to pay capital gain tax i.e., fair market value less cost of previous owner (land purchased after 1981) other wise cost or fair market value (purchased before 1981)
That fair market value claimed as consideration while calculating capital gain become the cost price of your land.
You have to consider both land and building cost for calculation of Advance tax .
Fair market value of land shall be taken as your cost of land for calculation purposes .
Fair market value shall be taken on the date when you convert the land from capital assets to stock in trade.
On conversion date you required to pay capital gain tax i.e., fair market value less cost of previous owner (land purchased after 1981) other wise cost or fair market value (purchased before 1981)
That fair market value claimed as consideration while calculating capital gain become the cost price of your land.
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