for urgent consideration
This query is : Resolved
04 February 2008
a proprietorship concern transfering his business to a company for 1/3rd stake in the company. for such the proprietor would receive in addition to his share more 30 lakhs rupees in cash or kind.
what is tax impact?
what is tax impact?
04 February 2008
Is this a slump sale?
04 February 2008
SECTION 50 C DEALS WITH COMPUTATION OF CAPITAL GAINS IN CASE OF LAND AND BUILDINGS.
SECTION 50 C IS APPLICABLE WHEN THE FOLLOWING CONDITIONS ARE SATISFIED.
1. THERE IS A TRANSFER OF LAND OR BUILDINGS OR BOTH .THE ASSET MAY BE LONG TERM OR SHORT TERM AND IT MAY BE DEPRECIABLE OR NON DEPRECIABLE.
2.THE SALE CONSIDERATION IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF STATE GOVT. FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER.
IF THE ABOVE CONDITIONS ARE SATISFIED,THE VALUE ADOPTED BY STAMP DUTY AUTHORITY SHALL BE TAKEN AS FULL VALUE OF CONSIDERATION FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN.
FROM THE FAIR VALUE OF CONSIDERATION DEDUCT THE INDEXED COST OF ACQUISITION AND THE DIFFERENCE IS CAPITAL GAIN .
SO YOU MAY CLAIM LTCG WITH INDEXATION .
IF IT IS A CASE OF A SLUMP SALE, PL. REFER SECTION 50 B.
R.V.RAO
SECTION 50 C IS APPLICABLE WHEN THE FOLLOWING CONDITIONS ARE SATISFIED.
1. THERE IS A TRANSFER OF LAND OR BUILDINGS OR BOTH .THE ASSET MAY BE LONG TERM OR SHORT TERM AND IT MAY BE DEPRECIABLE OR NON DEPRECIABLE.
2.THE SALE CONSIDERATION IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF STATE GOVT. FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER.
IF THE ABOVE CONDITIONS ARE SATISFIED,THE VALUE ADOPTED BY STAMP DUTY AUTHORITY SHALL BE TAKEN AS FULL VALUE OF CONSIDERATION FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN.
FROM THE FAIR VALUE OF CONSIDERATION DEDUCT THE INDEXED COST OF ACQUISITION AND THE DIFFERENCE IS CAPITAL GAIN .
SO YOU MAY CLAIM LTCG WITH INDEXATION .
IF IT IS A CASE OF A SLUMP SALE, PL. REFER SECTION 50 B.
R.V.RAO
04 February 2008
yes it is a slump sale and there is no land & building as such. there is a tranfer of patent right and at the same time a non-competitive agreement has been entered between prop. concern & company.
what is the tax impact on the company as well as on prop. concern?
what is the tax impact on the company as well as on prop. concern?
15 March 2008
The tax impact is worked out in accordance with section 50B if it is a slump sale
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