Hi
My query is regarding the land property compliance and taxation. I have seen some samples from internet people talking about market value, government value, registration value etc. I am bit confused. I am putting a scenario below which could help you understand the problem better.
Total land size - 5 cents
BUY
Government value of land (1 lakh per cent) = 5 lakhs (This value is registered in stamp paper)
Market value of the same land (3 lakhs per cent) = 15 lakhs
SELL
After 5 years, If this is sold for 5 lakhs per cent = 25 lakhs
and market value for it is 2 lakhs=10 lakhs
Profit:
market value profit= 25-15= 10 lakhs
govt value profit = 10-5= 5 lakhs
so should one pay capital gains tax on 10 lakhs or 5 lakhs. And how much percentage could be the taxation if someone sells in 2 years or 5 years or 10 years
Regards,
Justin