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Capital gain on devolopment agreement
hello all there is one case where development agreement was entered into with mr X in 2006. after making almost full payment of consideration mr x died in 2010. now to avoid legal dispute, builder make some payment to his legal heirs also in 2015. so my q is for computing capital gain , year of tranfer for legal heirs will be 2015 or 2006 in which original agreement was entered into. CII has changed drastically
Replies (1)
The development agreement should be accompanied by constructive transfer of possession to the developer so that the provisions of Sec 58A of the transfer of property act is given effect. Once this is in place, the date of incidence of the capital gains would be the year in which the agreement is entered and possession of property handed over. In this case if the possession was already handed over, then the capital gains must have been disclosed in 2006 itself.
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