Collaboration agreement

If you have received cash then it will levy penalty @100% so never accept cash payment.

If its a JDA i.e. Joint development agreement the income will be taxed in the year when you receive completion certificate.

You can deduct the value of land transferred by you to the builder.

The capital gain would arise on the floors you are retaining.

GST would also be applicable.

If you need further understanding have a phone consultation.

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Thank you.

Dear Sir,

Hope you are dong well !!

Land owner has to pay capital gain tax both the times.

1. At the time of receipt of completion certificate.

2. At the time of sale of that flat.

Capital gain will be taxable when the completion certificate will be issued and sale consideration will be stamp duty value/Market value of flats & Cost of acquisition will be share of flats in land or FMV of land if purchased by you before 2001.

At the time of sale of flats capital gain will be taxable again and that time sale consideration would be stamp duty value at that time and cost of acquisition would be stamp duty value considered today. You need to pay capital gain twice first against sale of land and second again sale of flats.

-In your case GST liability will arise on both events. 

1) Sale of Rights in land by Land Owner to developer.

2) Construction Service provided by developer to Land Owner.

When you (Land Holder) will transfer rights in Land to developer, Gst will be levied on this transaction . Time of supply will be considered to be the date on which the said developer transfer the possession certificate or similar instrument to you( Land Owner).

Now, even developer has to pay GST on construction service provided by him to you.

If you need any further assistance, please call me. As a part of real estate industry, we will guide you in proper manner.

Thanks & Regards,

Payal Chhajed

Hi

It would be LTCG taxable in the year of completion. 

Sales consideration would be stamp duty value of your share of property in year of completion as added by the cash received this year. 

Cost of acquisition will be only indexation of value of the property as on 1.4.01. (I assume it was purchase before 2001). Cost of construction shall not be provided as deduction.

You can claim exemption from capital gains under section 54.

If you have sell part of your share before completion, it will be taxable in that year itself.

If it is sold after completion, STCG/LTCG shall occur in year of sale.

Hello,

Landowner would be liable for capital gain twice, first at the time of issue of completion certificate and next at the time of sale of flats.

LTCG on issue of completion certificate, sale consideration would be stamp duty value. Cost of acquisition would be indexed value of FMV as on 1st April 2001. Cost of construction wont be allowed as deduction.

LTCG on sale of flats, sale consideration minus stamp value considered on completion certificate.

I hope this answer satisfies your requirement.

Regards,

CA Hunny Badlani

If you sale the flats before their completion, you would be liable to collect GST on sale of flats

1 It would be taxable when you receive completion certificate section 45(5A)

There are three situations first if you retain flats, second if you sell flats after completion third if you sell flat before completion.

Lets discuss first and second situation in both of them as i mentioned earlier capital gain would be sale consideration i.e. value of flats received less cost of land given to builder as his rights for share of his flat.

In second situation later when you sell flat its capital gain would be sale consideration received less value of flat as calculated above.

Why would you receive deduction of cost incurred by builder as you havent incurred any cost.

In your case, there would be two implications i.e. Income tax and GST.

Income tax

1. Capital gain will be charged to tax in the year of completion certificate. Sale consideration would be stamp duty value of the flats and the bank transfer received by you from the builder. TDS if any deducted by the builder will be carried forward and will be claimed in the year of completion certificate. Capital gain will arise for your share only.Cost of acquisition will be stamp duty value only.

2.At the time of actual sale by you then the capital gain would be sale consideration minus stamp duty previously considered at the time of completion certificate.

GST

1. It is the liability of the builder only.

Dear Sir,

You cannot deduct cost of construction borne by builder in 2a/2b.