Capital gains income

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This discussion addresses capital gains tax for a trust property lease. A trustee is considering a 99-year lease for a one-time premium, significantly lower than the property's circle rate. Key questions revolve around the tax status of the premium (rent vs. capital receipt) and whether the tax liability falls on the trust or the trustees. The advice suggests consulting a local expert to navigate these complex tax issues.

ajay kumar

ajay kumar (Querist)

02 October 2021 I one of the trustees want to lease out a trust property measuring 5000 square foots for 99 years for one time premium of Rs one crores. The Circle rate of the said property is around Rs 4 crores. If i do so, kindly answer my following questions.

1) What be our status in respect of capital Gain ?
2) if any capital gain liability is raised by ITO , upon whom it will be raised Trust or Trustees.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

04 October 2021 1. It can be argued that the amount received is one time rent amount and not capital receipt.
2. Against the trust, as the property belongs to it.
BTW... how can a trustee act upon independently without having powers given on behalf of trust?

ajay kumar

ajay kumar (Querist)

04 October 2021 All the trustees will jointly lease out the property.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

04 October 2021 Consult any local expert, and sort out the best option.....

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