Capital Gains Taxability in the hands of land owner in case of a joint agreement

1. That would be deemed to be taxable as capital gain on the date of issue of completion certificate in terms of section 45(5A) of the income tax act. I assume you have got CC in Feb 2023 and accordingly, your capital gain would be INR 2,560,870 as LTCG.

2. Assuming CC and OC dates are in same FY, capital gain would be INR 2,760,870 as LTCG.

3. Assuming CC and OC dates are in same FY, capital gain would arise at two level as below :

a) One which is based on the receipt of property in exchange of land which we have already calculated at point no. 1 i.e. INR 2,560,870 being long term capital gain.

b) Other is sale within 1 month of possession that would trigger SHORT TERM capital gain of NR 2,00,000 and accordingly, tax shall be payable thereon at prescribed rates.

Long term capital gain mentioned under 1, 2 and 3(a) shall be saved by investing in 54EC notified bonds within 6 month from the date of Completion certificate or investing in another residential property u/s 54, failing which you need to pay tax on the entire LTCG amount.

Regards,

Manoj B. Gavali