Capital Gains

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The company has been alloted land and right to construct Building on that under a lease of 99 years. The company subleases the same on exactly the same term ( Period 99 years ) and receives rent every month for the lease term. No upfront payment has been taken by the lessor. Query: How would this income be taxed ? Will income be treated as Capital gain ?

AI Summary

99-Year Lease Sublease Income Classified as Income from Other Sources, Not Capital Gain, Due to No Asset Transfer A company has been allotted land and the right to construct a building under a 99-year lease, which it then subleases under identical terms, receiving monthly rent without any upfront payment. The query concerns the taxation of this income and whether it should be classified as capital gain. The response clarifies that the income should be considered as income from other sources, not as capital gain, because there is no transfer of a capital asset involved.