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TAXATION for Project Completion Method

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Dhruv Prajapati

2 Points Posted on 07 June 2021

We are Builders and developers, we follow Project Completion Method for taxation, the current project is mixed ( Res + Commercial), we have received OC for the commercial portion and all the commercial shops have been sold. what are the tax implications, should we recognise commercial portion as Income? how to derive the cost for the same?

Replies (3)

Quick Summary

This discussion addresses the tax implications for builders and developers using the Project Completion Method for mixed residential and commercial projects. It clarifies that income from sold commercial units, even with partial OC, should be recognised for tax purposes. The actual costs incurred to date are to be used for taxation calculations.

CA. Heet Shah

Tax Consultant & Practitioner

6195 Points Posted on 07 June 2021

Definitely Income related to Commercial Premises needs to be recognized as Income from taxation perspective however the Income accrued on residential premise shall also be considered for Taxation perspective.