capital gain tax on a property given for development

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  1. prakashrv

    prakashrv New Member

    We are three people having a piece of land. It was purchased by my father around 1965 and after his death we got it as legal heirs. We have given that land for development purpose to a builder for construction of flats in Feb 2016. One auditor says that even though the builder will hand over the share of our flats about 2 years later, we have to pay the capital gains tax right now in this year while filing the income tax return. As you are aware, the last date for filing the IT return is July 31st. How can we pay the tax now when the building is under construction and we will be getting the flats ready only about two years later. Right know we didnot gain anything from the property as such because we have not sold it but only given it for development purpose in 50 : 50 ratio. I request you kindly clarify me about this and also is there any way out of this?
  2. ZED

    ZED Well-Known Member

    It depends upon drafting of the agreement. There are high chances that there is a transfer. There are many contradictory judgements in this regards therefore will have to see your jurisdiction also.

    Like 10 days are left, we have very little time left.
    In any case, get the property valued by the registered valuer to determine the value as on 01.04.1981.

    For detailed discussion you may contact me via mail. What your auditor is saying can be 100% correct in your case.
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