Latest Query & Reply

Income Tax Liability & GST Liability of Owner of Land & Builder in Case of

1)      Development Agreement made by both Say 50-50%

2)      Joint Venture Agreement Between them

Reply

 Sir,

Income Tax Liability-The taxability of JDA in the hands of the developer is under business income and in the hands of the landowner it is under capital gain. 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. GST Liability-when the Landowner receives a constructed property from the Developer in exchange for providing land, the Landowner would become liable for payment of GST. The liability to collect and pay GST would be on developer being a service provider. The GST rate applicable on such a transaction would be 18%.