Tds In Case Of Joint Development Agreement

In this case, in addition to non-compliance with various JDA clauses, ITAT also ignored the action of the company assessing the conversion of capital into stock into trade in previous valuation years and treated the transfer only as a capital asset. As has already been said, the new Section 45 (5A) tax regime applies only in the case of capital tax (JDA) asset transfers. In the case of the conversion of the capital asset into negotiation by the owner of the capital prior to the implementation of a registered development contract, the benefit of Section 45 (5A), that is, the deferral of the tax debt until the closing date of the project, is impossible and the capital gain resulting from the conversion and business benefit resulting from the sale/transfer of shares in the trading are taxable in accordance with section 45, paragraph 2, of the Act. A new section 194IC has been inserted, in which the withholding tax deduction (TDS) is applicable up to 10% at any amount, in return for the individual resident landowner/HUF, in accordance with the agreement covered in Section 45(5A). In addition, there is no threshold, i.e. it applies independently of the payment. H. Examples of Judicial GAAR applied to development agreements: the discussion can be summed up as a reference to the complex judgment of the ACIT vs. case. Jawaharlal Agicha (2016) 75 taxmann.com 121 (Mumbai): JDA/DA clauses determine whether this is a sale transaction or a service transaction that makes the developer`s development rights available to the landowner and therefore the JDA/DA documents must be carefully drafted in the case of a developer, the type of income would be the same.

The property would represent for him a trading of shares. Overall, his income consists of the proceeds from the sale he receives from purchasers of the developed land and the costs would result in the development expenses of the property. For the purposes of section 45, paragraph 2, if a certain percentage of the project developed in the form of dwellings/units, etc., is collected by the owner of the land as part of the sale consideration, the capital gain on the conversion is taxable the year in which the SIT, in the form of dwellings/units, is ultimately sold by the landowner to the final purchaser. In this case, the implementation of the joint development contract between the property owner and the developer triggered the tax debt on the capital in the hands of the owner during the year in which the contract is concluded and the property is transferred to the developer for the development of a project.