Capital Gain

[Ethirajan Parthasarathy]

Section 45 (5A) of Income tax provides formula for levy of capital gain tax for land owner who develops the property through registered JDA .

The section provides that capital gain will be levied in the previous year in which certificate of completion is issued by the competent authority and the consideration will be arrived as “stamp duty” value on the date of issue of completion certificate of the share of landlord received from the developer.

My related queries are

1. Whether the consideration methodology prescribed in the said section is subject to section 50C of income tax Act or not withstanding sec 50C.

2. There are many small projects developed through JDA and there is no statutory requirement for issue of completion certificate for such small property. How to determine the year in which tax is to be paid in such cases.
3. It is not clear when and what value the capital gain tax is to be paid for projects developed though “Unregistered “ JDAs

AI Summary

Joint Development Agreements Unravel Complex Capital Gains Tax Scenarios Under Section 45(5A) for Property Developers A discussion forum explores capital gains tax implications for Joint Development Agreements (JDAs). The dialogue examines tax treatment under Section 45(5A) for registered JDAs, focusing on scenarios involving small properties without completion certificates. Participants analyze tax deferral possibilities, possession transfer nuances, and potential tax triggering events, considering both registered and unregistered development agreements. The discussion highlights complex legal interpretations surrounding property development and taxation.