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Capital gain

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Ankush Agarwal (Querist)

23 July 2017 Two individuals are holding a land jointly, they want to develop this land into residential complex, can they form a LLP & do the business of development of property?, are they liable to pay capital gain tax on bringing the land to LLP? and also are they liable to pay stamp duty on transfer of land to LLP?

Amol S Joglekar

Amol S Joglekar (Expert)

23 July 2017 1. yes, they can form LLP
2. yes, they can do the business of development, subject to RERA; as applicable
3. section 45 is silent about LLP. (In case of firm, the capital gain arised in the year in which the captal asset is transferred to firm, on the value at which the same is recorded in the books of accounts.
4. Since LLP is in the name of those 2 who hold the land jointly, no need to transfer the land in the name of LLP. (However, if the land is transferred to LP, stamp duty is very much payable)

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