Separate Agreement for Land & Construction by Builder

Share This Thread
  1. daxesh_27565

    daxesh_27565 New Member

    First of all Thank you very much for giving your prompt & right advise for ally my questions arised in past.
    Now, once again I required your kind help and advice in details for the following mentioned issue.
    I sold my old residential property & purchasing procedure of new residential property is in progress to avoid LONG TERM CAPITAL GAIN TAX PAYMENT. I calculated long term capital gain tax. I must have to utilize this amount for purchasing new property.
    Now, I hereby wish to inform you that cost of purchasing new property is divided into two part by a builder. One is LAND COST & another is CONSTRUCTION COST. According to builder saying, land cost will be reflected in the sale deed (DASTAVEG) and construction cost will be reflected in the separate construction agreement. Is this ok. if yes, then total of this two cost can be considered for calculating long term capital gain tax. Also, I want to know that, is there any rule that construction agreement should be done before or after sale deed agreement ?

    Pl reply me as earliest and in full details as I am very close to the committed date of purchase with the builder. I must have to take decision within very few days.

    Thanking you,
  2. rudrabose

    rudrabose Active Member

    It is ok to be creating 2 agreements - 1 for land and the other for the construction.

    Exemption under Section 54 is allowed for both purchase as well as construction and therefore you would be able to claim the exemption as well.

    There is no such criteria regarding the date of agreement for construction and it can be done at any point of time.
Draft saved Draft deleted
Similar Threads Forum Date
Capital Gains tax in Joint Development Agreement Other Taxes Feb 2, 2017
Tax on Development Agreement Other Taxes Jul 11, 2016
Taxes on sale agreement and construction agreement Other Taxes Aug 5, 2015
LLP Agreement Amendment Other Taxes Mar 12, 2015
Payment of capital gain tax and agreement with builder Other Taxes Mar 8, 2015