Manoj invested his savings in a piece of land in 2005. In 2015 he sold his Land at a good profit. Will his purchase and sale of land considered as business? Give reasons in support of your answer.
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4
Answer:
NO this is not business and its consider as capital gain
Explanation:
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2
No, Manoj selling his land in 2015 which had invested from his saving in the year 2005 will not be considered as business as this is a residential property
Explanation:
- An "investment property" is "real estate property" purchased with the "intention of earning" a "return on the investment" either by way of "rental income", the future re-sale of the property, or both. The property can be held by an "individual investor", a corporation, or a group of investors.
- In the above case, the land is purchased from his investment for his personal purpose which he had sold at a "profit" in the year 2015
- The sale & profit of the land will be considered as capital gains and can be taxable. For this, income tax permits exemption on the "long-term capital gain" if the amount got from sale of land is invested in a new residential property subject to specific conditions.
- Properties that generate profits don't necessarily need to be residential. Some owners, especially companies, buy commercial property primarily used for business purposes. Maintenance of these facilities and maintenance will be expensive, but higher income will cover these costs. Such buildings can consist of industrial apartments or retail shops.
To know more
what is capital gains tax? - Brainly.in
https://brainly.in/question/3783182
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