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Sale of residential property after construction

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Querist : Anonymous

Querist : Anonymous (Querist)

11 April 2014 Assessee (Individual) main business is broker for real estate. Where he will be earning commission income on the same. In the span assessee has bought a property in different places and constructed in his own cost in short period of 6 to 8 Month (area less than 1200sqft).

Since the sale of property after construction the less than 36 Month
1. Should it be taxed at short term Capital Gain? or
2. Assessee main intention is to purchase a plot, construct and sell it should it be taxed as business income as construction contractor?

Kindly suggest.

Nikhil Kaushik

Nikhil Kaushik (Expert)

11 April 2014 depends on how this business has been reflected in the books. like how the land was shown as business purchase or capital asset etc.

the substance shall matter more. if the main intention is to engage in business of construction, it would amount to business income.

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