Profit on sale of rural agricultural land
This query is : Resolved
13 September 2016
A Private Limited company having rural agricultural lands (fixed asset and not stock in trade) and portion of the said agricultural land was acquired by Govt. and paid compensation. Rural agricultural land not being a capital asset as defined u/s 2(14) of the Act, the capital gain arises on transfer of said land is not taxable u/s 45 of the Act. How to account for the same in books of account of the company in view of MAT u/s 115JB of the Act.
13 September 2016
you can transfer the same to Capital Reserve. The MAT provisions will apply accordingly.
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