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Transfer of property

29 June 2018

In the joint venture land development agreement the landowner agrees to transfer the undivided share of the land to the extent of 1/3rd of the total area and agrees for the development of the land into residential units. In such a case weather the title to the land to the extent of 1/3rd passes to the developer once the JV agreement is registered or a separate sale agreement has to be registered ?

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3 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (182806 Points)
Replied 29 June 2018

Title of land doesn't get transferred by JV; only encumbrance created..

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Shyam Vasudevan (Manager) (48 Points)
Replied 29 June 2018

Thank you for the clarification. To avail the benefit of Sec. 54 EC of the IT act we have to invest in the specified bonds within 6 Months from the date of sale. In this case LTCG consists of cash + newly constructed residential house. So I would like to know when does the 6 Month period end.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (182806 Points)
Replied 29 June 2018

As per finance bill 2017, the new sub-section (5A) is inserted in section 45, which states that:

"In case of an assessee being individual or Hindu undivided family, who enters into a specified agreement for development of a project, the capital gains shall be chargeable to income-tax as income of the previous year in which the certificate of completion for the whole or part of the project is issued by the competent authority."

Which means the 6 months should end from the date of completion certificate.

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