Capital gains on Joint development agreement

[MOHAMED YACOOB SHARIFF]

Dear Sir, one of the client individual sold the property for ₹ 1.76 crores, and is in receipt of long term capital gains tax, he had purchased the land for ₹ 2.00crores and availed the exemption u/s 54, saying that the residential house will be constructed within the time allowed by the act,

But the above said land has been given to builder under the Joint development agreement on the condition that the builder should give 6 constructed flats out of 10

In the above situation how to proceed?

The above trx related to the asst. year 2013-14, for which return has not yet filed

[DR.MARIAPPAN GOVINDARAJAN]

Whether you have got clarified in the above issue? If not please inform.

AI Summary

Client Challenges Long-Term Capital Gains Tax Exemption Claim Due to Joint Development Agreement under Section 54 A client sold a property for 1.76 crores, originally purchased for 2.00 crores, and claimed a long-term capital gains tax exemption under Section 54, intending to construct a residential house within the legally allowed timeframe. However, the land was given to a builder under a joint development agreement, stipulating that the builder would provide six out of ten constructed flats. The transaction pertains to the assessment year 2013-14, and the tax return has not yet been filed. A respondent inquired if the issue has been resolved, seeking further clarification if needed.