Sale of development right

If development right in open plot of land sold to an Indian company by an individual which is inherited by ancestral and cost not known then how we will calculate capital gain. Whether such transaction is liable capital gain tax? What if the share is fixed in sale consideration of developed property instead to paying money at the time to transfer of development right?

Replies (3)

Whether sale of development right is liable to service tax or Vat?

 

What will be the cost of acquisition?

How we calculate index cost of acquisition?

for vat and service tax its applicable prevailing on the state rules.

cost of acquisition would be obtained from local tax authority as on april 1980 for valuation purpose. or from any govt approved survayer.

follow the agreement of development, present market valuations are mentioned clearly in that instrument( otherwise it would get rejected by registrar)

It depends on the agreement of developmental right. I think development rights is like giving the developer right to construct on the said plot after complying with the rules and code of that area. So before you give such a right, find out what kind of plot is it. There are people whose land comes under crz, which makes the developmental rights more difficult.

The title of the land will probably remain with you. You are only transfering the development rights to the developer for construction of a building by preparing a power of attorney duly stamped and registered. And after the completion of the building, as per the agreement, you will give another power of attorney to the developer to sell the flats after complying with the monetary terms and conditions with you.

Catch a good lawyer before agreeing to any terms with the developer.

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