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A kumar   02 March 2022

Capital gain on transfer of upsidc industrial leased land and construction of shed & boundary wall assest

CAPITAL GAIN ON TRANSFER OF UPSIDC Industrial Leased Land and Construction of Shed & Boundry wall Assest.

Sir, An Industrial Plot Was Allotted On Lease Basis By UPSIDC ( Uttar Pradesh Industrial Development Corporation) To An Individual in 1996. Later On The Individual Made Further Investment In Construction Of The Factory Building (Shed) and Boundry wall. Now Individual Interested To Sale The Land Building To Some Other Person. In The Case Of Leasehold Land Of UPSIDC, The Lease Deed Will Be Made In The Name Of Third Party By UPSIDC After Cancellation Of First Lease Deed (UPSIDC will take the through Transfer/ surrender affidavite from name of UPSIDC from Individual). Whereas Building Will Be Transferred By The Individual In The Name Of Third Party By Execution Of Registered Deed At The Prevailing Circle Construction Rate.
At present the UPSIDC industrial Leased Land rate is much higher then privious allotted rate. The present circle rate is just double of present UPSIDC Land rate. Due to no progressive area Individual is bound the transfer this land and building in the one fifth(1/5) approx cost of present circle rate.
Queries? (1). Under Which Provisions can sell and what is Applicable for tax laibilities for this Lesaed Land and constructed shed & boundry wall ? (2). Whether Capital Gain Will Arise On The Sale Of lease land and constructed shed & boundry wall.
(3) Whereas , As Per Provisions Of The UPSIDC, The Land Is Allotted On Lease Basis And On Transfer Of The Plot In Other Person’s Name, UPSIDC Charges Transfer Levy By Allotting The Same Plot In The Name Of New Allottee. (4). How To Minimize Tax Burden?


 1 Replies

PANKAJ BANSAL   24 March 2023

as mentioned in the query, as lease of the land will be executed by upsidc, the difference between the amount paid to upsidc and the consideration agreed to by the parties will be long term capital gains and the provision of income tax under section 50 C shall be applied . the difference between the wdv and sale value of thebuilding will be treated as short term capital gains business profit.

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