02 August 2010
one of the our client (private limited company) has registered in 1996, and the company has not start any operating activities, therefore there is no any transaction in profit and loss account other than depreciation on furniture and audit fee. In balance sheet assets side Land plot with Rs 17.50 Lakhs and some misc items and in liabilities side share capital (10 share holders) with same amoount.
My pblom. now another one company is purposed to purchase the plot of land of this company at around 5 cores. The said company going to accept the proposal. Therefore the company earned huge amount of long term capital gain. Please advise me how to minimize the capital gain tax, in the hand of company as well as share holder if any. is there any alternate option for tax planning (all shareholder are ready to transfer the entire share holding) please advise me.
02 August 2010
the land is not a agriculture nature. it has been acquired for the purpose of construction of building in 1996. therefore it is not exempt from tax.
02 August 2010
buying company can purchase all shares of selling company from share holders in 5 crores and buying company becomes holding company of selling company and deemed owner of land. Share holders of selling company may save tax u/s 54F of income tax act. (if gain from shares is long term capital gain.)
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