Taxes on developments agreement

Hi praveen . Firm will receive consideration in form of constructed property.. Hence, merely at the time of entering into development agreement, no tax will b levied . Tax will b levied when firm will get d possession of property (i.e. consideration) . Other views are welcome

You are going to convert your property in stock-in-trade (i.e. for business purpose), you will require to compute capital gain and to pay tax on it (by taking the value of property as per Index-II by which you are transferring property to developer).  In future when you will receive sale consideration of your portion you will compute it as your business income (i.e. total received in future minus index II value taken for capital gain earlier). Experts may correct my answer. Thanx. 

This point I missed out.. Praveen, you hv not mentioned whether business of firm is to deal in property or firm has purchased it as an investment only.. If we assume that it is purchased for investment, den I try to explain it with example.. . . . . If firm purch land for 50 lacs.. Consideration is flat of 75 lacs.. Then on date of development agreement, no tax.. Wen firm wil get possessio, cap gain on 25 lacs.. Afterwards, wenever firm wil sel flat, cost of acquisition wil b 75 lacs . . . . Other members, pls rectify me if I'm wrong