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Saving corporate tax completely on profit from real estate activity.

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vikas

Accounts n Finance Head

33 Points Posted on 12 September 2026

Hi eminents,

my co deals in land development i.e. purchasing land from farmers and selling plots to customers after some development viz road,plantation etc ...the difference/profit is taxable @ 25.17% corporate tax....as far i have little knowledge of tax saving...investing profit in reals estate facilitates tax completely. i want to have precise information with section/notification of the same along with practical approach. kindly let me know accordingly.

regards

vikas

Replies (2)

Quick Summary

This discussion explores tax implications for a company involved in land development and plot sales. While reinvesting profits into real estate doesn't exempt them from corporate tax, understanding the distinction between business profit and capital gains is crucial. The advice suggests legitimate tax savings can be achieved by accurately accounting for all costs, optimising revenue recognition, and claiming all available business deductions and depreciation.

Aashok Kumar Sharma

Finance/Compliance Consultant

68942 Points Posted on 12 September 2026

For a real estate development company selling plotted land, the earnings are classified as Business Profit (PGBP) and taxable at the applicable corporate tax rate (25.17% under the concessional regime under Section 115BAA). Reinvesting profits back into real estate does not grant tax exemption under Indian tax laws, as reinvestment benefits apply only to Capital Gains. Tax exposure can be legitimately minimized by fully accounting for all development and borrowing costs, optimizing revenue timing, and claiming all statutory business deductions and depreciation.