Capital gain tax from collaboration agreement

If you are talking about capital gain on joint development agreement then it will be charged when the builder gets completion certificate and for land owner capital gain would be FMV of flats received less value of land transferred to builder.

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Thank you

Dear Sir,

Hope you are dong well !!

Land owner has to pay capital gain tax both the times.

1. At the time of receipt of completion certificate.

2. At the time of sale of that flat.

Capital gain will be taxable when the completion certificate will be issued and sale consideration will be stamp duty value/Market value of flats & Cost of acquisition will be share of flats in land or FMV of land if purchased by you before 2001.

At the time of sale of flats capital gain will be taxable again and that time sale consideration would be stamp duty value at that time and cost of acquisition would be stamp duty value considered today. You need to pay capital gain twice first against sale of land and second again sale of flats.

-In your case GST liability will arise on both events. 

1) Sale of Rights in land by Land Owner to developer.

2) Construction Service provided by developer to Land Owner.

When you (Land Holder) will transfer rights in Land to developer, Gst will be levied on this transaction . Time of supply will be considered to be the date on which the said developer transfer the possession certificate or similar instrument to you( Land Owner).

Now, even developer has to pay GST on construction service provided by him to you.

If you need any further assistance, please call me. As a part of real estate industry, we will guide you in proper manner.

Thanks & Regards,

Payal Chhajed

Hello,

In case of JDA agreement, the capital gains shall be chargeable in the previous year in which the certificate of completion for the whole or the part of the project is issued by the competent authority. However, these provisions shall not apply where the assessee transfers his share in the project on or before the date of issue of the said certificate. The full value of consideration would be deemed to be the stamp value + cash consideration(if any) on the date of completion certificate.

I hope this answer satisfies your requirement.

Regards,

CA Hunny Badlani

In the hands of landowner.

- Capital gain will arise at the time of obtaining completion certificate and at the time of actual sale of flats. At the time of obtaining completion certificate, sale consideration would be stamp duty value of each flat and cash received from the builder.