tax on capital gain

This query is : Open

Tika Pandey (Querist)
Follow

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.

VINOD ARORA

VINOD ARORA (Expert)
Follow

02 August 2010 Could you kinldy specify the nature of land, agriculture or otherwise??

Tika Pandey

Tika Pandey (Querist)
Follow

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.

CA. Satish Kumar Goyal

CA. Satish Kumar Goyal (Expert)
Follow

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.)

Tika Pandey

Tika Pandey (Querist)
Follow

03 August 2010 Thanks sir,

is there any provision for private limited company,s share transfer to outsider as per companies act.

CA. Satish Kumar Goyal

CA. Satish Kumar Goyal (Expert)
Follow

03 August 2010 there is no restriction on transfer of pvt ltd shares to outsiders, but maximum number of share holders should not exceeds 50.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now