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Jaisika Kukreja (216 Points)

27 November 2018

Excess realise on sale of land or

STCG on sale of land

..r same thing or diff ..??

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13 Replies

Hitesh (Student) (3549 Points)
Replied 27 November 2018

Yes depends upon the period of holding if it is held for more than 24 months then both are different else both are same

Jaisika Kukreja (216 Points)
Replied 27 November 2018

I know that ..if more than 24 months it would be long term ...

but I wanted to know is there any diff. in this because amount is differs And both are not treated in same way ?

Hitesh (Student) (3549 Points)
Replied 27 November 2018

Yes if it is long term indexation would amount and amount would differ also exemption in capital gains depend on whether the asset is long term or short term

Jaisika Kukreja (216 Points)
Replied 27 November 2018

m not asking this.

Hitesh (Student) (3549 Points)
Replied 27 November 2018

Hmm ok.... can you provide few more details so that I can understand query

Jaisika Kukreja (216 Points)
Replied 27 November 2018

look ..m doing taxation of companies n while calculating book profits under MAT provisions both this given in question i.e

excess realized on sale of land held as investment rs. 30 lac

Short term capital gain on sale of land mentioned above rs. 40 lac

treatment ..????

Hitesh (Student) (3549 Points)
Replied 27 November 2018

oh okay for your query then ya treatment is Same under MAT u/s 115JB

Jaisika Kukreja (216 Points)
Replied 27 November 2018

tell me treatment ??

Hitesh (Student) (3549 Points)
Replied 27 November 2018

No adjustment is to be done to book profits assuming excess realized is already credited to profit and loss....for income tax computation under normal provisions amount of 30 lakhs is to be deducted and 40 lakhs is to be added

Z ( ) (2960 Points)
Replied 27 November 2018

Originally posted by : Jaisika Kukreja
	look ..m doing taxation of companies n while calculating book profits under MAT provisions both this given in question i.e excess realized on sale of land held as investment rs. 30 lacShort term capital gain on sale of land mentioned above rs. 40 lac treatment ..????

Realisation and gain are 2 disparate things but maybe the same in some cases.

Take a case of applicability of S.50C, in that case, STCG would be more than the excess realised. Other case is where the case is referred to the Valuation officer.

Further, the gain has to be computed by following the provisions of the Act. Whereas for excess realisation, may only mean an excess of realisation over the cost. This cost may or may not include stamp duty for eg if S.80C is opted and the stamp duty charges are not capitalised.

Other difference would be of the cost of transfer.

Where a business asset is sold and there is a loss, then that is treated as per PGBP provisions i.e if FVC>WDV then it would be a PGBP income and in that case, cost of transfer would go into P&L but if there is a capital gain, eg FVC> original cost then gain has to be computed as per S.48, wherein cost of transfer is necessarily to be deducted from FVC.

Definitely, there could be more scenarios. S.43(1) can also impact the cost. Since this case is concerned with Cap gains, therefore I do not want to go much into PGBP chapter.

A difference would also arise if S.50D is applicable because there we are considering the Fair market value and not the actual value.

A difference would also arise if S.49(4) is applicable because there we are considering the value taken u/s 56(2)(vii)/(viia)(x)

Similarly, S.49(5), as there also we have the concept of FMV

49(6) even 49(1).... I think I should mention entire S.49 and S.48.

Therefore, there could be differences.