Applicability of section 45(3) & 50C
This query is : Resolved
Drupad Patel
(Querist)
14 July 2011
there is a co-owner of N.A.land. they all wanted to transfer this land in to stock in trade & wanted to make residential society.
they created new firm for this.& they recorded this land at cost in each owner's capital a/c.
this land is purchased on 2008.
pls let me know what is the tax treatment.??
they created new firm for this.& they recorded this land at cost in each owner's capital a/c.
this land is purchased on 2008.
pls let me know what is the tax treatment.??
CA PARAS BAFNA
(Expert)
14 July 2011
It is assumed that the land is held for less than 3 years before transferring into the firm . It is a short term capital asset.
In case the property is recorded at book value there is no gain to the co-owners.
However they have to show the zero capital gain in their respective returns.
In case the property is Long Term , indexation benefit will be allowed and every co-owner will have LT Capital Loss in their hands.
In case the property is recorded at book value there is no gain to the co-owners.
However they have to show the zero capital gain in their respective returns.
In case the property is Long Term , indexation benefit will be allowed and every co-owner will have LT Capital Loss in their hands.
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