Capital Gains on JDA and flats sale after allocation

Your JDA involves two distinct capital gains events that must be analyzed separately:

Stage 1: Land Transfer to Developer (Section 45(5A))

Date of Transfer: Under Section 45(5A), the deemed date of transfer from your land to the developer is the completion certificate date in November 2024, not the JDA signing date (December 2020).

Holding Period: The holding period is calculated from your original land purchase in September 2015 to November 2024 (approximately 9+ years). This makes it Long-Term Capital Gains (LTCG) on the land-to-flats transfer.

Tax Implication: The LTCG on land transfer is taxed at 20% with indexation benefit or 12.5% without indexation, whichever is beneficial.

Stage 2: Sale of Individual Flats

Date of Transfer for Sold Flats: For the flats you sold in 2025, the holding period starts from the completion certificate date (November 2024), not from your original land purchase date.

Critical Point: The flats are treated as new assets acquired in November 2024 when the completion certificate was issued.

Long-Term vs Short-Term Classification

For your flat sales:

• 2 flats sold in February 2025: Held for approximately 3 months from completion certificate date

• 4 flats sold June-August 2025: Held for approximately 7-9 months from completion certificate date

Since all flats were sold within 24 months of the completion certificate date, these gains are classified as Short-Term Capital Gains (STCG).

Section 54 Exemption Analysis

Unfortunately, Section 54 exemption is NOT available for your flat sales because:

Why Section 54 Doesn't Apply:

1. LTCG Requirement: Section 54 applies only to Long-Term Capital Gains from residential property sales

2. Your Classification: Your flat sales resulted in STCG, which are completely excluded from Section 54 benefits

3. No Alternative: There's no capital gains exemption provision for STCG on property sales

Conclusion

Your current flat sales (Rs 3.5 crore gains) are classified as STCG due to the short holding period from the completion certificate date, making them ineligible for Section 54 exemption. The substantial tax burden could have been avoided by holding the flats for over 24 months from November 2024. 

The date of transfer for capital gains under a JDA is the Completion Certificate date, not the JDA date or Supplement cum Allocation date. The year of taxability arises on the completion certificate issue, making the gains on land transfer long-term if held over 24 months. Calculate LTCG from original land purchase to completion certificate date and treat flat sales after CC date as new assets for holding period. Section 54 exemption applies only if gains are long-term, based on this completion certificate date.