Income tax calculation for a builder

Sameer (EXPERT) (168 Points)

01 May 2012  

Dear sir

pls clarify the issue

how to calculate the incometax for a builder.I mean a builder who constuct some building by using his own plot & in between construction he enters into an agreement for some of flats & get some advances from customer,my question is whether the advances is an income for which he has been liable to incometax in the year of receipt,or treat is as an advance & finally when the building is complete & posssession is transfered he has to pay income tax