Income tax planning on dev agreement or joint venture

S S Dahale ( Agri and business) (439 Points)

24 April 2018  

  What agreement should a land owner prefer to avoid immediate LTCG as income tax ,on signing of agreement  for land development works ,when the Builder is ready to pay only 20% as refundable interest free deposit ,

 

 OPTION A:-Either  land owner to Go for Developemnt agreement  with special POA ( sec.45 .comes into picture as TRANSFER of entire  asset)

or

OPTION B:-and owner should opt  for JV agreement without POA with that  Builder , in that scenario,once units are built by the  Builder and proportionately handed over to land owner( by taking refund of  interest free deposit),

The land owner  also sells them  in open market , so LTCG on finshed product-flats /shops only has to be paid by land owner. not double LTCG as per Dev.agreement.

 Third querry also arises, land owner can not claim for GST  adjustment/ refund as the input GST is/was  in the name of the Builder .