There is a land on the name of 4 people.
Now they want to gift the land to people who are their relatives u/s 56(2)(vii). So no tax will be levied on the same. A proper registry of the gift will also be done by paying stamp duty.
Now the people who have got the gift want to construct flats on the same and then sell them.
They are receiving the gift as a capital asset.
So implications if:
1. They show the same as capital assets and flats constructed as cost of improvement.?
2. They convert the same into stock for business and claim construction expenses.?
3. Any other way you may suggest.?
Menu
Capital asset u/s 49(1) to stock
Replies (2)
I think Building and Land are two different capital assets. so we can't treat the expense as cost of improvement. It should be cost of building.
"Now the people who have got the gift want to construct flats on the same and then sell them."
From this statement I am assuming that the person who is recieving are doing Business activity.
Hence, cost of land will be a Cost of previous owner and the same will be a allowable Expenditure -sec 43C
Recent Topics :
- Pos related issue
- Gift of unlisted shares to friend upon marriage
- Utilising Section 54(F) for capital gains reinvest
- GST ewaybill closure and Bill to ship to GST numbe
- TDS ON PARNTER INTEREST
- Share important chapters of ca inter costing
- Free CA Foundation Study Material - PYQs with Sugg
- INCOME TAX
- Moving from old to new tax regime after notice
- Need urgent help on notice
Related Topics :
CAclubindia
