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Clause - 022 - Amendment of section 45.
Clause 22 of the Bill seeks to amend section 45 of the Income-tax Act relating to Capital gains.
Under the existing provisions of the said section, the Capital gains is chargeable in the year in which transfer takes place except in certain cases as provided in the said section.
It is proposed to insert a new sub-section (5A) in the said section so as to provide that where the Capital gains arises to an assessee being an individual or Hindu undivided family, from the transfer of a Capital asset, being land or building or both, under a specified agreement, the capital gains shall be chargeable to income-tax as income of the previous year in which the certificate of completion for the whole or part of the project is issued by the competent authority.
It is further proposed to provide that the stamp duty value of his share, being land or building or both, in the project on the date of issuing of said certificate as increased by consideration received in cash, if any, shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset.
It is also proposed to provide that the provisions of this sub-section shall not apply where the assessee transfers his share in the project to any other person on or before the date of issue of said certificate of completion and the capital gains shall be deemed to be the income of the previous year in which such transfer took place and the provisions of the Act, other than the provisions of this sub-section, shall apply for the determination of the full value of consideration received or accruing as a result of such transfer.
It is also proposed to define the expressions "competent authority", "specified agreement" and "stamp duty value".
This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years.
Capital gains timing under specified development agreements: tax charged when project completion certificate is issued, using stamp duty value. Section 45 is amended by inserting section 45(5A) to tax capital gains of individuals and HUFs from transfers of land or building under specified agreements in the previous year when the competent authority issues the project completion certificate; the stamp duty value of the assessee's share on that date, increased by any cash consideration, is deemed the full value of consideration. If the assessee transfers the share on or before that certificate date, capital gains are taxable in the year of that transfer and general provisions (excluding section 45(5A)) apply to determine full value. The amendment defines key terms and takes effect from 1 April 2018. of Press 'Enter' after typing page number.
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