Development agreement
This query is : Resolved
Vijai Bagaria
(Querist)
13 June 2015
Mr F is having Plot of Land and FSI cleared and also got CC (Commencement Cert.)
Mr. D want to develop it, construct flats and may give some flats to Mr. F.
What type of Arrangement will be more Tax effective (w.r.t. Income Tax, VAT, Service Tax and Stamp Duty Regn etc).
1. Whether doing construction in partnership with F and D as partners. or
2. Whether entering into devp agreement by F with D.
3. Outright selling the FSI to D. (In that case FSI and CC may have to be obtained again by Mr. D and consequent Expenses and delays.
Mr. D want to develop it, construct flats and may give some flats to Mr. F.
What type of Arrangement will be more Tax effective (w.r.t. Income Tax, VAT, Service Tax and Stamp Duty Regn etc).
1. Whether doing construction in partnership with F and D as partners. or
2. Whether entering into devp agreement by F with D.
3. Outright selling the FSI to D. (In that case FSI and CC may have to be obtained again by Mr. D and consequent Expenses and delays.
Amol S Joglekar
(Expert)
13 June 2015
The RISK associated with each of the 3 options is different. So the consideration (the money that F is going to get)will be different in each case. So it is not a wise practice to compare these 3 proposals assuming that RISK is same.
More than income tax, the decision should be RISK APPETITE based.
More than income tax, the decision should be RISK APPETITE based.
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