Real Estate JDA Capital Gain Tax

[Praveen kumar]

We have a piece of land and we entered into a JDA on Year 2016 (Prior to GST Implementation, July 1st 2017) and Entered Supplementary Agreement, SA in October 2017 for the development of it with a reputed builder.

The land was bought by my grand father in 1957.

The same has been inherited by my father (current sole owner) and he entered into this JDA.

As per JDA we will be getting 7 flats as part of JDA.

Now my questions are

Do we need to pay Capital Gain Tax we have to pay once the possession is given to my father by the builder?
Even if we not sell any flats still on getting possession do we need to pay Capital Gains Tax?

if we need to pay capital gain taxes, are they considered as Long Term OR Short Term Capital Gain Tax ?

Thanks

[DR.MARIAPPAN GOVINDARAJAN]

Your father is receiving 7 flats instead of money. Therefore the date of transfer of flats to your father will the date for deciding the capital gain tax. This is the long term capital gains tax.

[Praveen kumar]

Thank you for your valuable response.

AI Summary

Capital gain tax arises when flats are transferred under a JDA; receipt of flats triggers long-term capital gains. Receipt of built flats under a Joint Development Agreement constitutes the date of transfer for capital gains purposes; the allotment or possession of flats to the landowner triggers a capital gains event, and where the land qualifies by holding period the resultant gain is taxable as long term capital gain.