I got and agreement done for buying a plot of land in 7 months time by paying 25 % of the amount. As per the agreement I can buy the land or name someone who can buy it. If I name someone who wants to buy it how will the profit I receive from him be termed...capital gains or unaccounted money because I did not own the land and the profit is just for transferring the option to buy it to some one who is giving me a decent profit. Please help. I am an NRI and do not have any taxable income. Thanks.
RE:Capital gains on land.
by Amitabh on May 18, 2007 06:31 PM Permalink
Please remember that a right is also a capital asset.If you have purchase a right by paying some amount and later sell the right to someone and make a profit,it will constitute taxable capital gain.There is no question of unaccounted money.As the land is in India,so you will be taxed on this capital gain even if you are an NRI,but if you have no taxable income other than this,the basic exemption of rs 1,00,000 (Rs 1,10,000 from current financial year) may be deducted from the gain and you have to pay the tax on the balance.
RE:Capital gains on land.
by s s on May 18, 2007 08:28 PM Permalink
Thanks Amitabh. Well How much percent of the profit do I pay as capital gain tax by selling the right to some one. All this is within last three months. Thanks.
RE:Capital gains on land.
by Amitabh on May 19, 2007 08:55 AM Permalink
If all this has happend in the last three years,it will be treated as short term capital gain and sale proceeds of right less the cost of acuisition will be treated as your income and taxed at the normal rates applicable to any individual.
RE:Capital gains on land.
by s s on May 19, 2007 12:31 PM Permalink
Thank you Amitabh. Can you recommend someone through whom I can get Tax related advice and to file my Income tax returns as I have not filed them ever. I live in North kerala near Kannur and Mangalore. I am a Merchant Navy officer and most people are not familiar with filing returns for Merchant navy guys. Is a CA good or Income tax practioner better for the job. Thanks. Can you tell me something about yourself in an email to me. email. m34dashing@rediffmail.com Thanks.
