Joint Development Agreement of Land

[UpendraKumar Diwan]

Dear Sirs

Mr Vinod Kumar had 1500 Sq metre land as a form house in Bhopal. Mr Vinod Kumar had a Joint Development Agreement with a builder in Dec 2013 to construct 9 duplex houses .65% of the developed property will be of the builder and the builder sold 4 units .35% of the units are (Practically 3) are for Mr Vinod Kumar , the land owner. All the expenses were born by the builder including the permission formalities. The project is about to completion. The builder wants to hand over my share (35%) to Mr Vinod Kumar now. As the agreement to our family one unit will be gifted to his sister and one unit to his brother, the remaining one unit will for Mr Vinod Kumar . He is not going to sell this . The builder had given advance of ₹ 51000/- as the signing amount (To be refund at the end of project to Builder) What will be his tax liabilities on possession of houses in the form of capital gain,GST or any other duties?

UKDiwan

AI Summary

Tax Implications of Joint Development: Capital Gains Based on Fair Market Value, Taxed in Year of Property Transfer A landowner entered into a Joint Development Agreement (JDA) with a builder in December 2013 to construct nine duplex houses on a 1500 sq meter land in Bhopal. The builder receives 65% of the developed property, while the landowner retains 35%, equivalent to three units. The builder covered all expenses and sold four units. The landowner plans to gift two units to family members and keep one. A query was raised about the tax liabilities, specifically capital gains, GST, or other duties upon possession. It was clarified that capital gains are based on the fair market value of the houses, less the cost of the 65% land given to the builder, taxed in the year of property transfer.