Deemed capital gain u/s 45(2)

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CA Santosh Dhumal (Querist)
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17 November 2014 Assessee was in receipt of land from his father(N. A.). which was bought before 1 April 1981. now the assessee wants to construct flats & commercial shop on said land to sell in future. I need advice from experts, whether the trasanction as mentioned above attracts provision of Sec 45(2) i.e. capital gain on conversion of capital assets into stock in trade. if yes, 1) which date will be considered as "Date of conversion of Catital assets into Stock in trade" and 2) what will be the cost of acquisition in such case?.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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17 November 2014 i dont see any reason for taxation to trigger at this juncture. You can do the construction without treating it as your business.

in such a case, the taxation should trigger when you will sell the actual flats and shops.

Amol S Joglekar

Amol S Joglekar (Expert)
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17 November 2014 whatever date you decide as convenient to you can be said to be the date of conversion. (As Nikhil Kaushik has rightly said, NO need for you to do it right now)

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