Property - Development Agreement

Please clarify whether the Property in the question is to be treated as your Stock in hand, i.e., whether you are into the business of purchase and selling of house property. If this is your business, then under the Income from PGBP head your income will be calculated.

I am not into the business of purchase and selling of house property, I am an employee of PSU.

So that means the land and property is to be treated as Capital Asset in your hand, hence Capital Gain tax will be attracted. In your hand - The Actual Sale value or Valuation made by the Stamp Valuation Authority whichever is higher will be treated as the Full Value of Consideration irrespective of the fact that you didn't receive any consideration unless they are falling under the definition of "Relative". Against this, you shall be eligible to deduct the cost of acquisition and improvement. The balance amount will be taxable. As you are transferring all the floors within 24 months, hence it would be Short Term Capital Gain. In the hands of A and B - Assuming that they are not "Relative" of you - a. At the time of selling the Land to you Capital Gain tax will be attracted. All provisions related to the Capital Gain will be applicable. b. At the time of receiving the Floor as Gift from you - The value provided by the Stamp Valuation Authority would be taxable in their hand under the head "Income from Other Sources" if such value exceeds Rs.50,000.