Question ID :
37985
CAPITAL GAIN IN CASE OF DEVELOPMENT AGREEMENT
Assessee entered into development agreement with a developer to construct multi store residential building on his land. The assesse will receive 8 flats after construction of building as consideration.
Now the assessee has sold 4 flats in the building for which completion certificate has not been obtained from the competent authority. The remaining 4 flats will be sold after obtaining completion certificate. The development agreement executed in the F.Y. 2016-17. And the 4 flats are sold by the assessee in the financial year 2018-19. The completion certificate will be obtained in the F.Y. 2019-20, and the remaining 4 flats will also be sold in the F.Y. 2019-20.
My question is how to calculate capital gain tax u/s 45(5A) relating to transfer of land and transfer of 4 flats prior to obtaining completion certificate in the F.Y. 2018-19. Further how to calculate capital gain tax on transfer of remaining 4 flats after transferring the same in F.Y. 2019-20 after obtaining completion certificate.
Please do the needful
Posted by
MAHADEO VIRUPAX WALI
on
Feb 16, 2019
Filed Under
Capital Gains
You have to compute the capital gains in two lots.one for the sale of 4 unfinished flat sold during the financial year 2018-19 and another for the 4 finished flat after getting the completion certificate during the FY 2019-20. Accordingly you consider half of the cost of land as cost of acquisition for first lot capital gain and half of the cost of the land for computation of capital gain for remaining flats. Accordingly you should take the benefit of indexation etc and cost incurred for the sale.
Posted by
CA. JHA SHANKAR KUMAR on
Feb 18, 2019