Taxation in the hands of Developer in case of Joint Development Agreement

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This discussion clarifies the tax treatment for developers involved in Joint Development Agreements (JDAs). It confirms that income from JDAs is considered business income and can be declared under Section 44AD of the IT Act. Developers can offer a minimum profit of 6-8% on receipts when flats are sold. Additionally, GST is applicable to JDA development.

USHA B G

USHA B G (Querist)
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29 July 2022 Dear all,

Hope your doing well,

My query :- What is the tax impact for developer in case of JDA, Does it treated as business income.? if yes how to disclose the same in ITR.?? and can i file through sec 44AD .??

Total Sale Value of 5 Flats is Rs 85,00,000/-

Please give guidance on this

Thanks in advance

Regards
USHA B G

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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30 July 2022 Yes, its business income.
Yes, it can be declare under sec. 44AD of IT act.
If developer had these 5 flats as share in the JDA, and sold for total consideration of 85 L; he can offer minimum 6/8% over the receipts as his profit, as and when these flats are sold.

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USHA B G

USHA B G (Querist)
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30 July 2022 Does it impact GST sir

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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30 July 2022 Yes, GST is applicable for JDA development.

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