Joint Development Agreement with wife

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  1. Asish Ghosh

    Asish Ghosh New Member

    Hi! I am owner of a small real estate development firm (proprietorship), My wife has a property which we want to develop into a residential apartment and sell out. The fair value of the property at the time of buy (yr 2013) was 27 lacs. Talking with some of fellow developers I got a idea that we need to register a Joint Development Agreement with my wife.
    But the things that are really concerning are:
    1. What will be the tax liability of my wife(owner) and developer (me)
    2. How should we form the JDA such that we would be tax efficient
    3. Suppose I pay her 50% of the profit after completion of the project (say in the year 2018-19), and that amount comes to 27 lacs. As per my understanding Capital gain is "zero" so will the amount of 27 lac will be tax-free at her end?

    Please take some time to guide us through.

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