Capital gain calculation ? (Income Tax)

This query is : Resolved

( Author )
03 June 2012

Hello everyone,

on of my client has purchased plot in f.y. 11-12 at Rs.8,00,000.

he has entered into a joint venture with a builder to develop that land and make residential complexes. share being 40:60.

builder has made payment of non refundable deposit to my client of Rs.20,00,000.

how to compute the capital gain ?

CA PARAS BAFNA

( Expert )
03 June 2012

Can Non Refundable Deposit be treated and termed as Sales Consideration of the land?
If yes, calculate STCG on that basis.
.
Whether sharing is only in the Development Activity ? Please define the status as a firm or an AOP.
.
Treat the profits from Development Activity as Business Income.
.

Anand Dubey

( Expert )
03 June 2012

agreed with Mr. Bafna , you can also consider 20lacs + 40% of project as sales consideration for the plot

Soumitra Basu

( Expert )
03 June 2012

I think it is a joint venture business. The non refundable deposit should also be treated as income from business.

CA Abhishek Singh

( Author )
04 June 2012

THANK U VERY MUCH FOR UR REPLY. Mentioned below is the brief facts.

my client is an individual and he has entered into jv with another individual(builder). builder alone will develop the property and construct the building and my client will get 40% of the flat in the building.

construction will complete after 2 years. how to compute capital gain on rs.20 lacs received as non refundable deposit from the builder ?

when he is liable to pay the capital gain tax on rs.20 lacs and when he will get 40% of flats ?