Capital gain tax & GST on JDA

Let's take the question point wise:

1 since the amount of ₹20 lakh is refundable same is not required to be shown as income in this year, however if you forefeit such amount for any reason then you need to show it as income.

2 As you have received the land as a gift the year from which the cost needs to be indexed is the base year 2001-2002, because as per section 49 when a gift is received from a relative without consideration same needs to be indexed from the date when it was first purchased i.e. in your case from 2001-2002

3 you are going to give him land of 1100 sq yard i.e. 9900 sq ft and you will get flat of 18000 sq feet. So you need to find the FMV of the flat in that year to find your sale consideration and therefore your capital gain.

If we consider 1200/sq ft as FMV your capital gain would be sale price 21600000 and cost would be 29700000 so you will have a loss.

4 GST is applicable if in joint development agreement you give the land i.e. considered to developer before the construction is complete as such contract will convert into contract of construction and not contract of sale of complete flat and in such advance payment GST will be applicable on the value of consideration paid i.e. value of land given to him.

If you resell the property be it before the construction or after same shall not attract GST.

GST rate for residential property is 12% and for commercial property is 18% as far as I know.

5 If you sell your flats then its cost of acquisition would be 1200/sq ft assuming it's cost of acquisition is same as cost of construction and it will be short term capital gain i.e. 1800/sq ft - 1200/sq ft.

6. Since you are selling land in joint development agreement and getting flat in exchange as consideration you can reduce your capital gain by claiming exemption U/s 54F as per it's formula and in your case you can only claim exemption under this case as you are not receiving any consideration in form of money otherwise you could have invested amount in bonds u/s 54EC to claim exemption upto ₹50 lakh.

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Thank you

1. No, you don't need to show this amount in return as it's refundable amount.

2. You will consider cii of 2001-02 as it's an ancestral Property.

3. It will be calculated based on the fair market value of the property at the time of possession.

4. Yes, GST is applicable. If construction cost is known, you can pay GST @ 18% of cost of construction plus 10% mark-up for your share of flats.

5. There will not be any capital gain. Because your cost of acquisition will be the fair market value of the land at the time of possession.

6. Yes, you can claim exemption u/s 54F. But, you can't sale the house for next three years, if you call his exemption.

Dear Sir,

Hope you are doing well !

1.No, you don't need to show.

2. CII for 2001-02 as this is ancestral property.

3. Capital gain/loss will be calculated on base of fair market value of property at the time possession.

4. Yes, GST @18% will be applicable on cost on construction with mark-up.

5. As such , there is no capital gain tax liability.

6. Yes, you can claim exemption u/s 54F provided you cannot sale the house for next three years.

Thanks & Regards,

Payal Chhajed

Hi,

Please find below replies to your queries:

1. Not required to be shown in the return.

2. Consider cii of 2001-02 as it is an ancestral Property.

3. It will be calculated based on the fair market value of the property at the time of possession.

4. GST is applicable @18% on cost on construction with mark-up.

5. No capital gain.

6. Yes, you can claim exemption u/s 54F. But, you can't sale the house for next three years, if you claim this exemption.

Regards,

Nikhil.

Dear sir,

I have answered all your questions and you have received answer to all your queries then also you are not providing good rating. If you not giving perfect rating you should mention that in feedback and not ask question there if you have any query kindly post a follow back question.

As per your comment in feedback I would like to say that for calculating Capital gain one need to know the FMV of flat which you will get as consideration and therefore Capital gain cannot be calculated properly now, same thing was mentioned by me in my earlier reply. I have replied or posted my thoughts regarding GST kindly read the answer properly.

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Thank you

Hi,

- No need to show it in ITR unless forfeited by you, in which case it will be treated as income.

- 2001-02 as it is a gifted and ancestral property.

- capital gain will be Rs.2.97 cr.

- You need to pay GST@18% on the cost of construction plus mark up amount. Yes GST is applicable if flats will be sold during construction period otherwise not applicable (i.e.after receiving the occupancy certificate).

- Yes exemption would be available u/s 54F.

Thanks

Yes your understanding about the capital gain is correct, I had also calculated capital gain in point 3 of my answer but I calculated loss because I thought ₹1000/sq ft instead of ₹1000/ sq yd.

Regarding GST I would say that GST would be 18% and it would be on the amount of advance paid in your case this would the value of land given and so you have calculated the GST amount also properly.

Hope you find it helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Dear Sir,

Yes, you understanding for both calculation is correct.

Yes, your calculations are correct.

Hi,

Your calculation is correct.

Hi,

- Sale consideration in case of JDA is stamp duty value of flats given to you. As you mentioned stamp duty would be 18 per sqft. so sale consideration would be 1800*18000=3.24 cr

- COA should be total cost of land and index it accordingly i,e. 1000*2000/100*300=60 lacs

- Capital gain should be 2.64 cr

Thanks

1. No, you don't need to show this amount in your return.

2. It will be 2001-02.

3. We would need FMV as on 1.4.2001 to calculate capital gain.

4. GST will be @18% on construction cost plus 10% markup or it can be on uds of builder.

5. Yes, there will be capital gain.

6. You can claim exemption u/s 54F if construction is completed in 3 years.

Hi

Yes your understanding is correct.