Long Term Capital Gain on sale of land

I and My patner Jointly buy one Land 2500Sq. on Date: 16/12/2005 at RS. 4,40,000/-

we constructed bulding on that land for patnership buisness but we haven't done any contract for transfer of land to the patnership firm...

However later on we claim depriciation on land in patnership books of account like it's deem to be of patnership firms property... After some years we feel that our buiseness will can not be run longer and we plan to close that..

and than we sold that land in two lot.. 2090sq. with building on date: 14/12/2011 in RS. 50,00,000/- and secound lot in 9,72,000/- same day.. in which building is not in good condition it,s value comes as rs. 1,40,000/- now.. as being patner i received 30 lakh out ofg sales but which i used for pay of outstaning and loan of bank of patnership i left with rs. 7 lakh. what sholud be do for minimum capital gain? What was benifit availabale so no capital tax applicable..? If, Tax payable is it laiable for both patner or only tome..? What will be your advice..

asked Jul 19 '12 at 11:35 by pcshitesh 111


As property was classified as depreciation asset, sale of such property would lead to short term capital gains. Whole gains would be added to your taxable income and taxed as per normal slab rates.

There won't be any tax saving method available for tax saving on such gains.

answered Jul 19 '12 at 12:48 by Pankaj Batra 5.2k320

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Thank you for your replay.. However depreciation claim on bulding not on land... can i invest that money to acuire new asset which help to reduce capital gain
(Jul 19 '12 at 13:09) pcshitesh
If depreciation is taken only on building, you can sell land as long term gain. In that case you can avail tax benefit u/s 54F (by investing into residential house property) or 54EC (investing into capital gain bonds). Tax would be payable to both partners. Income tax is applicable at 20% on long term gains computed with indexation benefit.
(Jul 19 '12 at 14:14) Pankaj Batra

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Asked: Jul 19 '12 at 11:35

Seen: 1,420 times

Last updated: Jul 19 '12 at 14:14