My family has a plot since 1980 & in 2007 appointed a developer to develop the same. Now to recover cost of construction developer has sold partial commercials & residential shops & flats
Balance flats, he wants to handover to our family members & Questions are:
1. Do we need to pay LTCG tax? – Specially when we receive flats from developer who has developed our own land. 2. Land is in the name of 3 brothers. Now can developer will be able to transfer flats individually to each sons of 3 brother?, if yes then how? 3. What about service tax, income tax, stamp duty, expenses for registration?
21 May 2013
You should have paid LTCG in the year 2007 the day on which you have entered into development agreement with the builder. If you take the possession of the flats now no Service Tax is payable because you have completed the building or the flats through the builder and no sales was executed during construction period. So what are you doling. You are selling the finished product as sales and no services are involved. During construction period you construct on behalf of the prospective owner and you are rendering services as a contractor. Once the building or the flats are ready it is direct sales of finished goods in which VAT will be attracted.
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