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taxation of joint venture

Tax queries 1089 views 1 replies

one of client(individual) entered into a joint venture with another individual for development of plot. as per jv agreement both will develop the building on the said plot. plot is owned 60% by our client and reamaining 40% by other party. profit sharing ration will be 60:40 ie. 60 to our client and 40 to other party.

is PAN & TAN Necessary for JV. Is TDS deductible by the JV on payment of remuneration/interest/share in profit to the coventurer ??

 

However stamp duty paid only Rs.500/-. In my opinion it should have been 1% of the market value of the property as per Bombay Stamp Act which comes to Rs.50000(5000000*1%). in such a situation is the agreement valid ? if it is invalid then what can be done to make it valid now. agreement executed in february 2011.

 

plz. compute the tax payable by firm and the member as per following information.

 

net profit of aop- Rs.10,00,000/-
remuneration paid to coventurer A & B -Rs.3,00,000/- each.
Interest paid to coventurer A & B-50000/- each.

 

taxable income of A (excluding income from AOP) Rs.2,00,000/-
taxable income of A(Excluding income from AOP) Rs.0

 

calculate the tax payable by aop and member for A.Y. 2012-13.
waiting for your reply immediately.

Replies (1)

IN MY OPINION & AS PER THE GUIDLINES PUBLISHED BY ICAI IN JOURNAL MAY 2005, IRRESPECTIVE OF TYPE OF JOINT VENTURE AGREEEMNT, IT WILL BE TREATED AS AN AOP IF IT IS NOT FORMED AS COMPANY OR FIRM.

SO, YOU HAVE TO APPLY FOR PAN, TAN SEPARATELY FOR THIS JV.

PARTICULARY WITH STAMP DUTY, I DO NOT HAVE MUCH KNOWLEDGE OF STAMP ACT BUT IF SHARING IS BASED ON THE DEVELOPMENT OF LAND THEN IN MY VIEW, STAMP DUTY PAYABLE IS 1% OF THE BASIC LAND VALUE.


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