How to calculate LTCG on land if payment is received in multiple years

996 views 19 replies

Thank you Mr Ranjan. You help clarified everything for me.

@ Lokesh

Glad to help, whenever  possible, with my limited knowledge of Indian Taxation maze.

I found this article. I think there is some change now? https://www.taxscan.in/advance-received-for-sale-of-property-is-taxable-under-income-from-other-sources-if-agreement-for-sale-is-not-registered-u-s-562ix-of-income-tax-act-itat/305713

@ Lokesh

I checked the TaxScan link you have mentioned. It is a news article about a ruling by ITAT, Mumbai. I cannot read the full news article as TaxScan asks for payment. I do not know, whether CBDT has made any modification to taxation rules based on that ITAT order.

But if this has been implemented, there should be provision for mentioning this in Schedule OS.

Special rate of tax has to be applied as it is supposed to be Capital gains. 

Also, the Section 56(2) of the Income Tax Act referred by ITAT is not about advance payment but about Property Transaction done below Market value. 

Under OS, your 70 lakh would attract 30% tax + 12.5% surcharge + 4% Cess, would become a huge amount.

So check thoroughly  from other sources as well before doing your filing and tax payments.

Mr Ranjan, Hope you are doing fine. I have a few minor follow up questions. Hope you dont mind.  As per your previous suggestion, I checked the AIS of last year and its reported under SFT-005. Do I need to show this advance amount in ITR. I am asking because if I dont then will it be consdered lack of compliance since the amount is already captured in AIS? Will I get a notice?

 

 


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