Tax on partial allocation of land to shareholders

i was having some shares (its not trading shares , this shares indicate that you are supposed to get X Sqft of land ) ,   but because of not availability of land , they have given X-Y sqft of land , and then we did registration also for (X-Y) sqft only and for Y sqft which i was entitled to get they have given me market difference as per current rate.

The Question here is :

1. Will this amount goes into capital Gain ? Having this question because there is no sale of property , but i was being given market difference.

They have given me amount in 3 slots with below reasons.

Proportionate Return for less allocation for Land  
Return to match market rate as they have allocated less land
Amount For Delay
Asked 1 year ago in Capital Gains Tax from Jabalpur, Madhya Pradesh
The nature of your transaction can be properly ascertained only after seeing the agreements. The answer to your query may not be correct based upon the information given by you. 

Based upon what you stated, it appears that you acquired rights for allocation of x sft of land and not for the land itself. 

It appears that the cost of acquisition is for x sq.ft of land. As only (x-y) is registered, your right to receive the x sft of land is converted into acquisition of land. So when the land is registered in your name, there is capital gain on extinguishment of your right to receive x sft of land. 

Now in lieu of allotment of land, you received proportionate return for less allocation of land. Further you have received return to match market rate of land and additional amount for the delay. All this will be part of consideration you have received for the extinguishment of your right to receive y sft. Capital gains will have to be ascertained on this basis.
Even if you have received the amount in 2 financial years, the date on which the extinguishment of your right takes place will be the date on which your capital gains arises. 
B Vijaya Kumar
CA, Hyderabad
290 Answers
5.0 on 5.0
  Talk to B Vijaya Kumar
Shares held in unlisted companies were earlier classified as LTCA if held for more than 12 months and were eligible for a concessional rate of tax at 20%. However, as per Finance Act 2014, these shares would now qualify as LTCA only if they are sold after 36 months instead of 12 months, which means that shares held for more than 12 months but less that 36 months would now qualify as STCA. The gain arising on such sale of securities would be taxed at progressive rates of tax as applicable, instead of the beneficial rate of 20%.

As per my view In your above case you are liable to pay capital gain.The value you received both the market value of land and proportionate return for less allocation will be treated as sale proceeds.
Shyam Sunder Modani
CA, Hyderabad
955 Answers
4.9 on 5.0
  Talk to Shyam Sunder Modani
For your second question you can declare the total amount in current financial year.
Shyam Sunder Modani
CA, Hyderabad
955 Answers
4.9 on 5.0
  Talk to Shyam Sunder Modani
You are not clear about what is this share. The land and money is given in consideration of what. Whether you have share in an immovable property or in partnership asset or any other mode of holding . Or this was a business deal between you and others.
Vijay N. Kale
CA, Hyderabad
248 Answers
4.9 on 5.0
  Talk to Vijay N. Kale

Ask a Question

Get tax advice from top-rated chartered accountants. It's quick, easy, and anonymous!
Ask a question

Other Questions

Chartered Accountants

Abhishek Dugar
CA, Mumbai
766 Answers
5.0 on 5.0
Shyam Sunder Modani
CA, Hyderabad
955 Answers
4.9 on 5.0
Rohit R Sharma
CA, Mumbai
719 Answers
5.0 on 5.0
Vishakha Agarwal
CA, Bangalore
213 Answers
5.0 on 5.0
Lalit Bansal
CA, New Delhi
75 Answers
5.0 on 5.0
Shiv Kumar Agarwal
CA, Delhi
195 Answers
5.0 on 5.0
Vishrut Rajesh Shah
CA, Ahmedabad
239 Answers
4.9 on 5.0
B Vijaya Kumar
CA, Hyderabad
290 Answers
5.0 on 5.0
Ria Nagpal
CA, Ahmedabad
28 Answers
5.0 on 5.0
Bhagyashree Kankaria
CA, Pune
26 Answers
5.0 on 5.0