Is capital gains tax applicable for JDA

1. Yes even than also capital gains tax will be paid by you. What you entering in is quid pro quo agreement i,e he will provide you apartments & in return you will give him land area for 4 apartments. Though their is no actual flow of money but still properties are being exchanged. Thus implication of Capital gain will arise. Since you are parting with Capital Asset i.e your land so capital gain on it needs to be paid. Question is what can be considered as selling price of land ??

1. Selling price of land can be considered as benefit you are getting (cost of 4 flat which builder will sell to others )or 

2. you would have got if sold in open market. (can be obtained by valuation done by valuer)

Note: Capital Gain is part of Income tax - (Direct tax) & GST is indirect tax i.e consumption tax. Both needs to be paid & both are separate.

2. Yes Registration charges are not tax. It is done to register flat/Apartment in your name.

Hi Ramesh,

1. No,it will not become double taxation. 

Both are the different/separate taxes which are needs to be paid by landowner.

Even land owner has to pay capital gain tax both the times (I.e. at the time of receipt of completion certificate and at the time of sale of that flat).

Capital gain at the time of completion certificate would be calculated by deducting land cost from the stamp duty value/market value of flat received by land owner.

Capital gain at the time of sale of any of the flat will be calculated by deducting stamp duty value of the flat(taken at the time of completion) from actual sale consideration.

You need to pay capital gain twice first against sale of land and second again sale of flats.

2. Yes, you will have to again pay registration charges to get registration in your name. 

Thanks & Regards,

Payal Chhajed

Hi

1. Yes, capital gains shall be taxable income the year of completion of property under JDA. Capital gains shall be calculated considering the stamp duty value of the 4 flats received as sales consideration and indexed cost of land as cost of acquisition. It is not a double taxation.

Further, if you sell any of the 4 flats in future, you'll be liable to capital gain tax- short term or long term depending upon when they are sold.

You may also claim exemptions under capital gain.

2. Yes, registration charges need to be paid. It's not double taxation.

Yes you need to pay capital gain tax as you are going to sell your land for 4 flats so capital gain tax would be FMV of 4 flats less cost of land sold.

Yes GST needs to be paid in case of JDA since you are going to take service of contractor to build house.

There is no double taxation as both are different tax one is gain and another is an indirect of which you can take credit it you use it for your business.

Think of it as you purchase car you pay GST then you sell you pay capital gain tax it's one and the same thing.

You need to pay registration charges to get yourself registered with local government. All these taxes are revenue of different government authorities and they are not overlapping each other so no double or triple taxation it's registration charges and not tax.

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

Thank you

Hi,

1. Yes, you will have to pay capital gain tax when you receive the flats from builder with a completion certificate.

it should be calculated on stamp duty value of flats received minus indexed cost of land acquisition.

2. Yes, you need to pay registration charges. It has to paid to different government authorities.

Hence, there is no double/triple taxation. 

The taxability of JDA in the hands of the developer(Builder) is under business income and in the hands of the landowner it is under capital gain. And you have to pay Tax or Charges on both the Above condition.

Hi,

- Capital gain is direct tax and on the profit/gain earned by you from sale of immovable property. It is paid from own pocket.

- GST is indirect tax. You are not paying it from your own pocket.You have to collect it from the person to whom goods or services are provided.

- Once you receive the completion certificate, you are liable to pay capital gain tax on the stamp duty value of the 4 flats in the year in which completion certificate is issued. Stamp duty value of 4 flats will be the sale consideration and the total value of land will be the COA which you have to index. If you have received any amount for JDA then it would also be considered as sale consideration. If there is any TDS deducted then you can claim it at the time of filing of the ITR. Exemption is available under section 54F.

- You need to register under GST as you have transferred the development rights to the builder through the JDA and in exchange of which you are getting developed 4 flats which is exchange and considered as supply under GST. You are required to charge GST on the value of 4 flats received by you.

- Yes you need to pay registration charges which you will claim as part of Cost of the 4 flats.

Thanks