Special Provisions for Computation of Capital Gains in Case of Joint Development Agreement [Section 45(5a)]

• December 29, 2020
• CA Chandan Agarwal's Office

SPECIAL PROVISIONS FOR COMPUTATION OF CAPITAL GAINS IN CASE OF JOINT DEVELOPMENT AGREEMENT [Section 45(5A)]

Sub-section (5A) was inserted in section 45 with effect from 01.04.2018, i.e., from the assessment year 2018-19. According to section 45(5A), where the capital gain arises to an assessee, being an individual or a Hindu undivided family, from the transfer of a capital asset, being land or building or both, under a specified agreement, 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.

Legislative intent for introduction of Section 45(5A)

The Memorandum explaining the provisions of Finance Bill, 2017 states as under with respect to the introduction of Section 45(5A):

Read more on: https://taxguru.in/income-tax/analysis-section-455a-income-tax-act-1961.html