Tax Impact in case of JDA

In my opinion at the last transfer to ultimate buyer

The point where the capital gains are deemed to accrue will purely depend on the terms of Joint Development Agreement. Where the agreement is of such nature that possession is given in part performance of a contract, the liability of capital gains tax will arise on the handling over of such possession to the builder.

„« If the possession is not transferred but deferred until the construction is completed, the liability to capital gains tax will arise in the year in which the developer completes the construction.

„« Where the landowner and builder execute joint development agreement, if the consideration is receivable in built-up area to be constructed and handed over by the builder to the landowner, it is advisable to avoid the applicability of section 53A of the Transfer of Property Act. This can be achieved by mentioning in the agreement that license is granted to the builder to enter the premises and construct the building. The possession is retained by the landowner, which will be handed over as and when the built-up area is constructed and delivered. By this stipulation, the transfer will take place only in the year in which the built-up area is received and not before.