INCOME TAX ON SALE OF PLOTS

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This discussion clarifies income tax implications for clients selling plots developed from agricultural land. It explains that GST registration is not required as the sale of plots is not subject to GST. The focus is on calculating capital gains tax, advising that development expenses should be allocated equally across all plots to reduce the taxable gain. It also highlights the importance of adhering to cash receipt limits for transactions.

raghavendra b

raghavendra b (Querist)

07 January 2024 DEAR SIR,

ONE OF MY CLIENT PURCHASED AN AGRICULTURAL LAND HE IS DEVELOPING THE LAND AND SELL ONE BY ONE IN THIS YEAR NOW HOW TO CALCULATE CAPITAL GAIN ON SALE HOW TO DETERMINE EXPENDITURE TO REDUCE THE CAPITAL GAIN TAX. BECAUSE NEARLY 50 PLOTS WILL BE DEVELOPED ALMOST HE RECEIVED MAXIMUM AMOUNT IN CASH. DOES HE NEED TO OBTAIN GST REGISTRATION OR NOT ONLY HE HAS TO PAY INCOME TAX ON SALE OF PLOTS.

REGARDS

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

08 January 2024 GST registration not required as GST not applicable on sale of plots.
Only income tax payable on sale of plots.

raghavendra b

raghavendra b (Querist)

08 January 2024 thank you sir,

but the expenses spent on developing the land while deducting the expenses capital gain because the sale proceeds one by one how to put to gather all expenses. and he received sale amount in advance by cash

regards

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

08 January 2024 Cash receipt should not be more than Rs 20,000.
Allocate the capital expenditures equally to the plots to be sold.

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