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Hey...We 3 brothers own a piece of land....We are…

Hey...We 3 brothers own a piece of land....We are selling this land to a company in which we 3 are …

Hey...We 3 brothers own a piece of land....We are selling this land to a company in which we 3 are the directors...How CG will be computed in this case?? The said company will allot us shares in lieu of transfer of land...


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Kanishka Jan. 18, 2018

For Income tax purpose, the said transaction has to be valued at stamp duty value(SDV)...The SDV will be deemed to be the sale consideration...Shares worth sale consideration has to be issued by the company...Also number of shares to be issued has to be in accordance with fair market value of the shares...In case you issue shares at premium, and issue price is more than FMV, then the difference will get taxed in the hands of company...


So in crux issue shares at fair value...No. of shares to be issued has to be in accordance with FMV of land.


Hope it suffice your requirement.