JDA -how to account cash consideration

420 views 4 replies

Keshav Nimbalker

21 Points Posted on 23 January 2020

I take x amount as consideration at time of signing JDA as owner and want to show it as cash consideration (Sec 45A) when the project is complete and then calculate my LTGC liability .How do I describe this amount in the JDA?
If I mention it as cash consideration will the developer be obliged to deduct TDS of 1%?
If so ,it will reflect in my 26AS for the current year whereas the project will be completed say 18 months later.When I file my return then how will the amount of TDS be reconciled?Will there not be a mismatch in 26 AS as I cannot show the X amount in the current year's return?

Replies (4)

Roshni

Studwnt

1141 Points Posted on 24 January 2020

Yes if value exceeds more than 50 lakhs then TDS at 1% has to be deducted. There won't be any mismatch.

rama krishnan

12244 Points Posted on 24 January 2020

Show the cash consideration received in liability side of balance sheet as advance

Keshav Nimbalker

21 Points Posted on 25 January 2020

Thanks.My point is if I show it as advance for any consideration and record it as such in the Agreement will the Developer be not obliged to deduct TDS?What do I state in the JDA....advance received?but towards what?If my file is scrutinised how will I explain this receipt and get over non- deduction of TDS by Developer?As an individual I don't draw a balance sheet so if there any provision in my applicable ITR to show this as advance under Liabilities?

rama krishnan

12244 Points Posted on 25 January 2020

In the agreement it's to be mentioned as advance and at the time of completion of jda, the final consideration may be determined and TDS may be deducted accordingly. this could be hassle-free option for you and actual procedure in respect of JDA. still let's wait for experts opinion