Tax liability on joint venture for apartment complex
This query is : Resolved
28 July 2019
Hi,
I am entering into a joint venture with a builder to construct and sell apartments. I am the landowner. The builder will bear the expense of all relevant approvals, construction, inspection and I will get a share of the revenue from sale of apartments.
What will be my tax liability for this project:
1. Will there be any GST liability? If yes when will it be due.
2. What will be the income tax liability for me and when will it be due? I have owned the land for 10 years.
Thanks,
Anurag
I am entering into a joint venture with a builder to construct and sell apartments. I am the landowner. The builder will bear the expense of all relevant approvals, construction, inspection and I will get a share of the revenue from sale of apartments.
What will be my tax liability for this project:
1. Will there be any GST liability? If yes when will it be due.
2. What will be the income tax liability for me and when will it be due? I have owned the land for 10 years.
Thanks,
Anurag
28 July 2019
1 GST liability will be there when flat is sold before receiving completion certificate
2 You are liable for capital gains tax on the date of JV agreement considering market value of the land and deducting indexed cost.
3 Joint venture profit will be taxed at 30% as AOP. Share of profit not be taxable again.
2 You are liable for capital gains tax on the date of JV agreement considering market value of the land and deducting indexed cost.
3 Joint venture profit will be taxed at 30% as AOP. Share of profit not be taxable again.
28 July 2019
Hi,
Thank you for the prompt reply and advice. I have a few clarification:
1.How is capital gains tax due when I have not received any payment or no construction has started. If for some reason we don’t get approvals to build will my capital gain tax be refunded?
2. I will sell the flats when they are completed , pay the taxes and remit builders percentage to his account.
3. What amount will be treated as profit from Joint venture?
Thanks.
Thank you for the prompt reply and advice. I have a few clarification:
1.How is capital gains tax due when I have not received any payment or no construction has started. If for some reason we don’t get approvals to build will my capital gain tax be refunded?
2. I will sell the flats when they are completed , pay the taxes and remit builders percentage to his account.
3. What amount will be treated as profit from Joint venture?
Thanks.
29 July 2019
1 Pay tax when you sell the flats.
2 Yes.
3 Balance amount after deduction of construction cost and value of land considered for capital gains.
2 Yes.
3 Balance amount after deduction of construction cost and value of land considered for capital gains.
29 July 2019
Thanks a lot for the valuable advice.
29 July 2019
Welcome..........................
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Advantages and disadvantages new income tax act 2025 question
- Query regarding applicability of UDIN on MCA forms signed using DSC by a Chartered Accountant
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Spice form, ? mark comes in address
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
