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How to calculate capital gain in case of collaboration agreement
I have entered into collaboration agreement with abc builder on 16th of august 2007 for construct the land and the land size was 7.28acre and after construction the builder will allote developed plotted area at the rate of 1400 sq yards for per acre. the possession was handed over to builder on 16th august 2007.The builder got the registry for 7.28acre in their name on march 2014 and paid rs 2 crores to me and took back the same rs 2 crores on march 2014 as price money paid for allotting 1400 sq yards of developed plot in lieu of per acre of land and the said 1400 sq yards of land against per acre i started selling in the subsequent years please advise me the point of taxation under capital gain in the whole transaction
Asked 5 years ago in Capital Gains Tax
Dear Sir,
Hope you are doing well !
Can you please explain further so that we can help you in best possible way?
Thanks & Regards,
Payal Chhajed
Dear Sir,
Apologies but I am unable to understand the query. Can you please explain briefly the specific query?
Regards,
Nikhil
Dear Sir,
Question is not clear. Please elaborate it.
Thanks
Capital gain arise in FY 2013-14 when possession given & payment recd.as far as land concern . about sale of developed area eihter you can traet it as capital gain or business income & calculate tax accordingly
i bought land measuring 7 acres in 1995 on 16th aug 2007 i entered into collaboration agreement with abc builder who will develop the land in plots and will give developed plots of 1400 sq yards for per acre land developed and the possession was given on 16th aug 2007 to the builder for development of land. the builder got the registry of the said land in his own name in march 2014 by paying rs 2 crore to me and on the same date get this money back from me towards allotment of 1400 sq yards developed plots per acre and further when i got the registry for developed plots i sold those plots in the year ending 2017. you are requested to guide me the year in which i was supoosed to pay capital gain tax
Asked 5 years ago
Hi
The data is actually confusing.
What did the developer get from the deal?
As far as I understand this, first there happens to be sale of land to the developer for which you were liable to pay capital gain taxes in FY 13-14.
Second is you purchase the developed plots and sell the in FY 17-18. Again for this there would be capital gain levied.
I could not understand why the transaction in 2014 was done at all?
As per data shared by you possession given in 2007 while consideration recd in 2014 as per my view agreement complete in 2014 when both event posssesion & payment completed hence LTCG arise in FY 2013-14 hence LTCG to be paid in FY 2013-14 itself Again when you sold plot in 2017 then STCG or business income arise in tha t year.
Hi,
What do you mean by developed plots? Was it a flat or plot?
Further, also let us know when did you receive the plot or flat?
Answers will depend upon the above two questions
- How much you paid to builder for development of plots?
- Why builder get the registry done in his name?. Development of plots can be done through agreement also. There was no need for registry in the name of builder.
- How the cost of land and developed plots be same i.e Rs. 2 cr ? Cost of developed plots should be more than cost of land. Have you made any payment in cash to the builder apart from 2 cr?
- What is the value of the plots sold in the year 2017?
- How 2 cr was paid to you?
Thanks
Apologies but I am still not very clear about your query and hence will be unable to answer.
Dear Sir,
Could you please provide the information as requested by all experts?
Otherwise, we are unable to provide correct answer.
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