Capital Gains In Joint Development Agreement

Pursuant to the definition of transfer, the transfer under these joint development agreements took place in the year in which immovable property, land or buildings or both were transferred to the developer. – The owners wish to build a building on the mentioned land, but due to the lack of experience in the construction and development of land entrusted to the developer GAAR for development, it is in itself the subject of a full comment. However, it would be unfair not to draw readers` attention, at least in summary, to the possible application of agreements in the form of development agreements. The clauses of JDA / DA determine whether it is a sale transaction or a service transaction, under which development rights are made available to the developer by the owner of the land and must therefore be carefully elaborated JDA / DA documents – Once the project is completed, Mr. X is entitled to 60% of the area built in the project in the form of housing / shops, etc. in summary, in accordance with the agreement concluded, the new § 45 (5A) has, among other things, fixed the tax year of the capital gain regardless of the year of capital transfer (in the form of land) u/s 2 (47) of the law; and also eliminated subjectivity in the valuation of non-monetary counterparties received/accumulated as a result of the transfer under the development agreement. If, in the context of a development agreement, assessee allowed the developer to enter premises on his land to do all the things necessary for the construction of housing, it could be said that assessee has ceded possession of its land to the developer and that there is therefore a `transfer` under Article 2(47) and that it was taxable as a capital gain in the year of conclusion of the contract. Since the contract is partially performed in the type referred to in section 53 of the Transfer of Property Act, 1882, section 2(47) Clause (v) is clearly attracted. Under Article 45(5A), the date of the transfer is also of paramount importance, since the benefit of indexation is available until the date of the transfer of capital, regardless of the year in which the capital gain is taxed under the new P.

45 (5A). In addition, the time for investment u / s. 54 and 54F is calculated only from the date of transfer. Indeed, hence the deadline for investments u/ s. 54 and 54F be provided, that is to say from the date of the joint development agreement or from the date of the act of completion? This is an unanswered question. – Before the amendment of section 54F by the Finance Act 2014 w.e.f. A.Y. 2015-16, there are many stops allowing the deduction of u/s 54F for more than one dwelling obtained under a development contract. However, the amendment limited the benefit to a single dwelling house. [See TAV Gupta vs ITO [2018] 93 taxmann.com 249 (Bangalore), Ms Adeebunnisa Begum Vs ITO, ITA No.

816/2017 (Hyderabad), etc.] Under section 45(1) of the Income Tax Act 1961, all profits or profits from the transfer of an asset were made in the previous year, to the extent that §54, 54B, etc. under the heading “Capital gains”, income tax is considered to be the income of the previous year in which the transfer took place. Where the illustrator has converted his land into shares in negotiation and entered into a development contract with the developer for the construction of residential buildings, the capital gain resulting from the conversion of land into commercial inventory would be taxable in proportion to previous years, where the appraiser`s share of the built land was sold by the Assessee or retained for personal use in accordance with the construction contract and where the commercial income correspondents were offered. To the extent that the provisions of this subdivision do not apply, where the appraiser transfers his share in the project on or before the date of issue of the abovementioned graduation certificate and the capital gains are considered to be income from the preceding year in which the transfer takes place, and the provisions of this Act, other than those of this Subsection, shall apply for the purposes of determining the total value of the products obtained against such transfer or in return. .