Capital gains arising for a land owner in a joint Venture with a Builder

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  1. kazak117

    kazak117 New Member

    My wife has 53 cents of land in Trivandrum City and she is planning to enter into a Joint Venture with a Builder to develop the property and to share the built up area in an agreed ratio. What I would like to know is:
    1. Whether capital gains will accrue at the time of the agreement as the agreement envisages transfer of the built up flats only after 36 months.
    2. What is the position regarding capital gains in case a flat out of the share of my wife is sold before the flat is actually handed over( during launch period of the project)
    3. My wife aquired the property through partition in 1989 and previously it was in the name of my father-in-law who aquired it in 1955 through a partition again. How will the value of the property in the hands of my wife be calculated.
    I would appreciate if somebody can enlighten me in this matter.

    with regards,

    Suresh Bhaskaran
     
  2. rudrabose

    rudrabose Active Member

    1. In case the Builder pays you something the cash or you sell a part of the floor/land - Capital Gains would be levied at the time of sale or handover of possession (whichever is earlier) and not at the time of entering into the agreement.

    2. Capital Gains would be levied at the time of sale of floor.

    3. The fair market value of the plot as on 1-4-81 would be considered and then it would be indexed.
     
  3. kazak117

    kazak117 New Member

    Thank you Mr.Rudrabose for your prompt response and the same is very much appreciated. This just a corollary to the doubt already expressed.
    Will Capital gains tax be payable in case an advance is received for a flat that is expected to be handed over after construction ie after a period of 3 years.

    Regards,

    Suresh Bhaskaran
     
  4. rudrabose

    rudrabose Active Member

    Advance received would be taxable in the year in the which the property has been registered as sold.

    Mere agreement wont be considered. The date the transaction is registered with the Registrar Office would be considered as the date of sale.
     
  5. kazak117

    kazak117 New Member

    Thanks a lot Mr.Rudrabose

    Regards,

    Suresh Bhaskaran
     
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