capital gain tax

umair (Querist) 21 September 2009 This query is : Resolved
my family owns some land and to save tax they decided to make a pvt ltd company and buy the land and issue shares to the family members accordingly ,now we want to divide the land ,we do not want to sell it ,every member needs posession of the land we bought it for 150 rupee /sqft and now its 750 rupee /sqft . now my question is how can we divide it so tat i can get the posession of land

Thank youriven

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A V Vishal (Expert) 25 September 2009
Once the land is transferred to the company it is its property and the only way is to sell it back to the owners at the present value, in turn the company will incur capital gain/business income based on how the land is treated in the books viz. as a capital asset or stock in trade.riven