Mr.X had a open plot at pune. he made agreement with one builder to devlope the plot. in consideration he is getting 50% construction out of total construction. Please let me know is capital gain tax is applicable on his 50% share and how. is any exemption u/s 54.
The agreement was registered in F.Y 13-14 so if tax is applicabale then when he has to pay the tax after compliation of the construction or immediately.
thanks & regards,
Rajesh Patil
The taxability depends on the structure of the development agreement. if possession is handed over to developer thorugh a POA or othersie then section 58A of he Transfer of property act will apply and the transaction will be treated as transfer under 2(47). in such a case capital gains will be attracted on the date the possesion is handed over.
If ownershp and possession is retained till completion of construction then capital gains will arise on transfer after completion
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