Hi,
The Joint Development Agreement (or "JDA") is the most typical and well-liked type of contract for building homes in our nation. Both the developer and the landowner prefer it as a form. However, there are several problems with JDA's taxability under the Income Tax Act of 1961 (often known as "the IT Act").
Taxability in the Developer's Hands: The income received by the Developer under a JDA in the form of the proceeds from the sale of his interest in a developed estate is regarded as his "business income" and is subject to the corresponding tax laws.
The sum received by the landowner in any manner is regarded as "Capital Gains" and is therefore subject to taxation in the landowner's hands.
Code on JDAThe following categories are covered by the GST on Joint Development Agreements and SAC Code:
| Category | GST Rate | SAC Code |
GST on the transfer of development rights (taxability in the hands of the developer) |
18% |
9972 |
GST on the construction service of apartments that the developer gave to the landowner for the transfer of development rights |
Affordable residential apartment: 1% Non-affordable: 5% Commercial apartments: 12% |
9954 |
GST on development rights attributable to unsold apartments (residential) |
18% |
9972 |
GST on the transfer of development rights from the landowner to developer |
Nil |
9954 |
I hope this helps you.
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In a Development Agreement, which taxes are applicable and who pays them?
amrish
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2 Year
2023-02-03T10:09:12+00:00 2023-02-03T10:18:36+00:00Comment
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