Taxability of joint development agreements: completion certificate timing governs landowner capital gains and deemed consideration.
Receipts to developers under a Joint Development Agreement are taxed as business income, while landowners' receipts as shares in built-up area or cash are treated as capital gains when the land/building is a capital asset. Finance Act amendments defer chargeability for individual and HUF landowners under registered specified agreements to the previous year in which the competent authority issues the completion certificate, with stamp duty value on that date (plus cash received) deemed as full consideration; transfers before the certificate trigger capital gains on transfer. A separate TDS obligation requires developers to withhold tax on monetary payments to resident individual/HUF landowners, and practical issues persist on indexation, reinvestment timelines, and timing of taxation of monetary consideration. (AI Summary)