Capital asset to stock in trade
This query is : Open
01 August 2011
There is a land on the name of 4 people.
Now they want to gift the land to people who are their relatives u/s 56(2)(vii). So no tax will be levied on the same. A proper registry of the gift will also be done by paying stamp duty.
Now the people who have got the gift want to construct flats on the same and then sell them.
They are receiving the gift as a capital asset.
So implications if:
1. They show the same as capital assets and flats constructed as cost of improvement.?
2. They convert the same into stock for business and claim construction expenses.?
3. Any other way you may suggest.?
Now they want to gift the land to people who are their relatives u/s 56(2)(vii). So no tax will be levied on the same. A proper registry of the gift will also be done by paying stamp duty.
Now the people who have got the gift want to construct flats on the same and then sell them.
They are receiving the gift as a capital asset.
So implications if:
1. They show the same as capital assets and flats constructed as cost of improvement.?
2. They convert the same into stock for business and claim construction expenses.?
3. Any other way you may suggest.?
01 August 2011
3. Any other way you may suggest?
In case the land is a long-long term capital asset, to get the full benefit of indexation, the Capital Asset should be converted in stock in trade by the 4 persons who are the original holder.
In case the land is a long-long term capital asset, to get the full benefit of indexation, the Capital Asset should be converted in stock in trade by the 4 persons who are the original holder.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Tax on Deemed Capital Gain
- Type of Capital Gain
- F & O PROFIT REPORTING FOR AY 2026-27
- Regarding ITR filing with more value than showing in AIS/TIS
- Exiting partner in partnership firm in gst portal
- Banking Related Issue
- Consequences of Non-Deduction of TDS under Income Tax???????????????
- IT returns for fresh job holders
- Due Date Clarity
- NRI INSURANCE ADVISOR
- Seeking Advice: High Tax Shortfall on Job Switch + Let-Out House Property Loss in FY 2025-26
- TDS offline utility
- TDS on rent received on hardship compensation being rent on redevelopment of building
- Housing Society-ITR5
- TDS on Rent received on redevelopment of building
- Indian IT Portal issue in computing tax as per UK-India DTAA
- Capital Gains on sale of residential flat
- Upload Level ValidationITR3Category of Defect B/D
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
