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capital gain

29 September 2017

in builders case land and building treated as inventory
if building sold less than circle value
how we calculate profit from that building
in circle value or actual value of sale
which one taken for calculation for income tax

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6 Replies

(Guest)

it is trate as inventary

and what is considertion u receive for sale of ur building

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Gopinath MV (Senior Analyst) (50 Points)
Replied 29 September 2017

As per Sec.2(14) of Income Tax Act, 1961, Any asset held as Stock-in-trade, consumable stores or raw-materials held for the purpose of business or profession are
excluded from the definition of The Capital Assets.

The profit should be calculated as you calculate a Sale of Goods in the ordinary course of business.

(Guest)

so the cost of sale will consider

md shahadat (88 Points)
Replied 29 September 2017

if it is in case of builder than yes treated as inventory
and tacable amount will be frofit
if there is no profit than can take deduction for loss too

(Guest)

treatement done as per pgbp

u can adjust loss with profit

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Krishna Sarma (Article Assistant) (74 Points)
Replied 29 September 2017

Actual Sale Consideration to be taken for calculation. The comparison of Actual sale consideration or SDV arises only in case of transfer of Capital Asset (Sec 50C).