Question ID : 41144

Business Income or not ?

A person is dealing in Sale & purchase of rural Agriculture Land. Suppose in a Year, he Purchase 4 times and sale it. Is it to be shown as business income or no where. ??

Answer ID : 81321

Rural agriculture land is not capital asset. Therefore sale of such land is not taxable. If the land is hold as stock in trade and the transaction of purchase and sale of such land is done regularly and it is in the course of business, it is business income, otherwise not. Regularly and purpose of the transaction is deciding factor not the volume of transaction.

Answer ID : 81322

if he is regular trading with profit motive then it should be his business income . otherwise various arguments to treat as capital receipts after go through other paramenters

Answer ID : 81337

It depends on the motive of the person. If he purchase with the intention to sell for profit and not for holding as an asset then it will be in the nature of business and the land will be treated as stock in trade. The difference will be profit from business. Otherwise Capital gain provisions applicable and refer the Capital asset definition.

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