Hi
No, its not necessary to have partnership firm or AOP.
It will be a capital gain and will be brine by all of you proportionately
Yes, it will be taxable in the hand of each of you proportionately
Calculation of individual capital gain
We five joint holders of one land from long time. Our share of ownership is well defined. We have purchased this land to earn capital gain. But after long waiting time, as we could not fetch good price, we had decided to construct commercial complex on land as a part of additional capital investment. We have decided to sell only few units equals to construction cost only. Remaining units will be keep for further time till good price receive OR we will divide and distribute units among us as per ownership. (This will decide later on). We are constructing the building ourselves. And contributing construction cost payment money as per share of ownership in land. We have not form any partnership OR AOP. Is it compulsory to form partnership OR AOP?. If we sell some units what is the tax implications? Is it business gain OR capital gain? Is tax calculate individually? ( NOTE: Our main aim to earn capital gain, not the formation of business).
Asked 7 years ago in Capital Gains Tax
Hello Sir,
This is a very litigative question and totally depends on the point of view of your assessing officer. How have you kept the property now if there is no AOP/ Partnership firm ?
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Hi,
The Tax Department can take a view that your venture as a business and can treat all of you as an AOP and tax you accordingly.
Regards,
Keerthiga Padmanabhan
M.Com., CA, LLB
It is better to form a AOP for the same.
Or if you have not then maintain the accounts properly so that each Capital gains can be calculated easily and declared under Capital gains.
We are unable to form AOP at current stage, as land and permission are in our five joint holders name. If we form AOP/partnership firm then we have to transfer assets in AOP/Partnership firm. And tax liability start at the time of transfer. So what should be the best strategy at current stage? Please suggest. We have currently shown this as capital investment in our respective account. Should we continue with that?
Asked 7 years ago
Hello,
Yes you can. Only at the time of transfer/ sale individual owner shall be held responsible for his share of transaction.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
No Problem. You can maintain the accounts and can show it under capital gains
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