Query Regarding Presumptive Taxation

Direct Taxation

Respected Sir, If suppose, Mr.A purchased a land for Rs.40 lakh and develops it into 3 Plot layouts. Mr.A converted Land into Stock-in-trade. Mr.A sold plots for Rs. 1 Crore. Now, Can Mr.A opts for Presumptive Tax and show gain as 8% of Gross receipts of Rs. 1 Crore under Sec 44AD since his turnover is below 2 Crore ? Please kindly clarify this query sir. Thank you sir. Video Details ------------- P3A - Income Tax (AY24_25) Chp 4.3 - Profits and Gains from Business and Profession (25) #30. Revision: S.44AD, 44AE

Mamidi Vinisha

CA Inter

★ 970

25-Apr-24 16:24

522

Answers (2)

You need to calculate capital gains on the date of conversion of capital asset into stock in trade. Since sale of stock in trade comes under business. I think presumptive taxation can be opted.

Sugathan P.R

CA Final

★ 8K+

26-Apr-24 00:17

First capital gain shall be taxable as per Section 45(2). However, business can be computed as per presumptive provisions.

Shiva Teja

Faculty

27-Apr-24 10:12