Joint development agreement

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ANKUSH GARG (Querist)
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27 June 2018 Dear Sir,

One of our client had transferred his residential house to a developer to construct four flats on it. Out of which one flat is to be given to the developer and rest of the 3 will be owned by the owner.

As per Section 45 (5a) as inserted by finance act 2017, such transfer of land or building ir both will be chargeable to tax in the year in which certificate of completion will be provided by the competent authority.

Section also specify the total consideration to adopted for this purpose. But it nowhere talk about cost of acquisition in such case.

But my question in this case is
1."Will it be considered only Transfer of Land" or "transfer of Land & Building Both"?

2. "Whether the cost of acquition be the cost of Land only or the cost of land or old building both"?

3. "What will be the nature of resultant capital gain (LTCG or STCG) on transfer of building because the transferred building will be new after develpoment"?

4. "Whether share of owner in the resultant new building will be eligible for deduction under section 54"?

5. "section 45 (5a) also provides that where the owner transfer his share before completion of the project, this section 45 (5A) will not apply there"? "Whether it should be whole the share" or "partial share also be considered for such purpose"?

Please answer my query point wise

ANKUSH GARG

ANKUSH GARG (Querist)
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28 June 2018 Please reply on the topic

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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29 September 2021 As the house property given for development, consider the asset as a whole, no need to segregate them.
The cost of 3 flats as per circle rate.
Yes, but questionable about section, whether 54 or 54F..
For the part sold.

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