banner_ad

Changing Company Constitution

Tax queries 420 views 4 replies

Private Limited company sells a land how is Long Term Capital Gain tax be applied?

1 - Does the Private Limited Company pay tax on Long Term Capital Gain?

2- After the sale of land when the private company distributes the remaining to shareholders , are they taxed again for the Capital Gain in Share Price?

Please advise on best way to minimize tax liability.

Thank you!

 

 

Replies (4)

1. Yes 

2. Dividend distributed to shareholders is taxable. 

Advise depends on many factors like is it still running business etc. 

Thank you Lekshmi. To understand this better - are we saying the shareholders will be subject to double taxation?

As an example if lets say the LTCG for sale of property is 1 crore, The Private Limited pays lets say 20 Lacs tax on this and decides to distribute the remaining 80 Lacs to shareholders (let us assume single shareholder with 100% shares). The cost of shares to the shareholder was at Rs 10 face value. Does it mean that the shareholders will end up paying now additional capital gain tax on the 80 lacs?  Please advise.

No capital gain will be chargeable to them, as the company will share the profit to their shareholder, the income they gain on that basis they will have to pay tax.

So in above example I provided are you saying that the Company will pay 20 Lacs tax and shareholder will pay tax on remaining 80 Lacs distributed as dividend as per the Income Tax slabs? Won't will be huge taxation on both sides?


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
Featured 29 April 2026
Manager- Finance and Compliance

Naveen Fintech Pvt Ltd

Kolkata

CA Inter

View Details
Company
Featured 28 March 2026
CA Final

Ashok Amol & Associates

New Delhi

CA Final

View Details
Company
Featured 14 April 2026
GST CONSULTANT

Abhishek G Agrawal & Co.

Korba

CA Final

View Details
Company
Featured 28 March 2026
Accountant

Ashok Amol & Associates

New Delhi

B.Com

View Details
Company
Featured ARTICLESHIP 19 March 2026
Article Assistant

Gupta Sachdeva & Co. Chartered Accountants

New Delhi

CA Final

View Details
Company
Featured 13 April 2026
GST CONSULTANCY

Abhishek G Agrawal & Co.

Korba

CA Final

View Details