Taxability of builder transaction

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kunal (Querist)
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29 June 2013 MR. X (Builder) enters into an agreement with Mr. y to one flat under construction link payment plan.. for a total consideration of RS 30 lakcs and this flat is to be registered after 4 years.

sir now my questions are:

1) is the above transaction chargeable to capital gain tax in the hands of builder?

a) if yes, then in which year year of agreement or year of registration?

b) suppose circle rate of the above flat after 4 years is Rs. 1 crore. are provision of stamp value(deemed sales consideration) apply?

OR

2) is profit from above transaction chargeable under head PGBP, as it is a business of builder.. if yes

a)is there any effect of circle rate on the above said flat.?

dear experts i'm waiting for your response..

Soumitra Basu

Soumitra Basu (Expert)
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30 June 2013 IT WILL NOT BE TREATED AS CAPITAL GAIN IN THE HANDS OF THE BUILDER BUT IT WILL BE TREATED AS BUSINESS INCOME.
AS PER NEW PROVISION, THE REGISTERED VALUE OF THE FLAT SHALL BE TREATED AS CONSIDERATION RECEIVED BY THE BUILDER FROM THE PURCHASER IN THE YEAR OF SALE.

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kunal

kunal (Querist)
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01 July 2013 that means after 4 years Rs. 1 crore shall be taxabale in the hands of builder ???

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