Income tax saving on sale of shop

This query is : Resolved

Rajen (Querist)
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09 November 2012 Hi,

One shop was purchased in Dec'05. The shop is being sold in FY 12-13. Owner wants to explore different options available to him for tax saving (preferably with reference of various sections). Owner falls below the taxable limit, hence, is not filing returns since few years.

Please can anyone help for the same?

Thanks!

CA SAYANTAN BASU

CA SAYANTAN BASU (Expert)
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10 November 2012 The sale of the shop will come under Section 50B of the income tax act 1961 ,which is slump sale .... in that case ,It will be treated as capital gain . If business is more than 3 years then it will be treated as LTCG and if it is less than 3 years then it will be treated as STCG .....So in that case it will be taxable ....
For LTCG Section 80 series is not applicable ..... So you have to pay tax on LTCG .....

Rajen

Rajen (Querist)
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12 November 2012 Hi,

Thanks for your reply.

There is no business that is currently happening using that shop. It was rented out. The owner is not involved in any business activities. In that case, can we not use section 54EC or 54F? If no, why?

Regards,
Rajen