The document discusses key considerations from a tax perspective when drafting a joint development agreement (JDA). Some of the main points discussed include:
1. Ensuring all parties with rights to the land are included as parties to the JDA, such as family members if it is ancestral property.
2. Thoroughly tracing title to the property and documenting any prior agreements or encumbrances on the land.
3. Clearly outlining the obligations and timelines of each party, such as the developer obtaining approvals and completing construction by certain deadlines.
4. Addressing the tax implications depending on if the land is considered a capital asset or stock, and whether provisions like section 80IBA
The document summarizes key points of the Karnataka Real Estate (Regulation & Development) Rules 2017. It outlines additional disclosure requirements for ongoing projects, such as depositing 70% of funds collected in a separate bank account. It also details rules around project registration, withdrawal of funds, and interest payable in cases of refund. Overall, the rules introduce onerous financial disclosures and timelines for ongoing projects to increase transparency for home buyers.
ICDS III, IV and Draft ICDS on Real Estate TransactionRishabh Khandal
This standard provides guidance on accounting for revenue from construction contracts. It outlines that revenue and expenses should be recognized based on the percentage of completion method as the construction project progresses. The percentage of completion may be determined based on surveys of work performed or costs incurred. Revenue is only recognized to the extent of contract costs if the outcome cannot be reliably estimated during the early stages of a project. The standard also provides guidance on combining or segmenting contracts, accounting for contract variations, and disclosing contract balances.
This document discusses the taxation of joint development agreements in India prior to the insertion of Section 45(5A) of the Income Tax Act. It covers:
1) The key parties in a joint development agreement are the landlord and builder/developer and tax issues can arise for both.
2) Joint development agreements can involve the landlord receiving a share of the developed area, a share of revenue from property sales, or a monetary consideration for transferring development rights.
3) Section 45(5A) was introduced in 2017 to settle controversies around the date of transfer, but only applies to certain types of agreements and individuals.
4) Several tribunal rulings found that Section 45(5A)
The document discusses taxation issues related to real estate developers and redevelopment projects.
1. It outlines the different stages of real estate development projects and discusses when income should be recognized for tax purposes - whether using the project completion method or percentage completion method.
2. It also discusses whether income from redevelopment projects should be taxed as business income or capital gains for the landowner participating in the project.
3. The document provides an overview of key sections of the Income Tax Act relating to taxation of real estate developers, capital gains, revenue recognition, and the powers of tax authorities to refer cases to valuation officers.
The role of Chartered Accountants (CAs) under the Real Estate Regulatory Authority (RERA) includes:
1) Certifying withdrawal of money from designated project accounts for developers
2) Preparing annual reports on project accounts for statutory auditors
3) Verifying transactions in separate RERA bank accounts as directed by RERA
4) Acting as authorized representatives and providing other services to RERA authorities.
Real Estate (Regulation and Development) Act,2016Venket Rao
To promote efficient & transparent real estate transactions & consumer protection.
Establishment of regulator for regulation & promotion of real estate sector.
Establishing an adjudication mechanism for speedy dispute redressal .
The document summarizes key points of the Karnataka Real Estate (Regulation & Development) Rules 2017. It outlines requirements for project registration such as furnishing annual reports and audited financial statements. For ongoing projects, it requires status disclosures and depositing 70-100% of amounts collected in a separate bank account. It also details provisions for withdrawal of funds, registration extensions, project details to publish online, interest rates for delays and more. A subsequent press note provided clarification on some aspects for ongoing projects and establishment of the regulatory authority.
The document discusses various legal aspects of property transactions in India. It covers topics like agreement of sale, payment schedules, stamp duty, registration, possession, defects, society formation, penalties for builders, and differences between a lease and license. Key points include that an agreement of sale must be registered within 4 months, builders are liable for construction defects for 3 years, and they must form a society within 4 months of selling 60% of flats.
The document summarizes key points of the Karnataka Real Estate (Regulation & Development) Rules 2017. It outlines additional disclosure requirements for ongoing projects, such as depositing 70% of funds collected in a separate bank account. It also details rules around project registration, withdrawal of funds, and interest payable in cases of refund. Overall, the rules introduce onerous financial disclosures and timelines for ongoing projects to increase transparency for home buyers.
ICDS III, IV and Draft ICDS on Real Estate TransactionRishabh Khandal
This standard provides guidance on accounting for revenue from construction contracts. It outlines that revenue and expenses should be recognized based on the percentage of completion method as the construction project progresses. The percentage of completion may be determined based on surveys of work performed or costs incurred. Revenue is only recognized to the extent of contract costs if the outcome cannot be reliably estimated during the early stages of a project. The standard also provides guidance on combining or segmenting contracts, accounting for contract variations, and disclosing contract balances.
This document discusses the taxation of joint development agreements in India prior to the insertion of Section 45(5A) of the Income Tax Act. It covers:
1) The key parties in a joint development agreement are the landlord and builder/developer and tax issues can arise for both.
2) Joint development agreements can involve the landlord receiving a share of the developed area, a share of revenue from property sales, or a monetary consideration for transferring development rights.
3) Section 45(5A) was introduced in 2017 to settle controversies around the date of transfer, but only applies to certain types of agreements and individuals.
4) Several tribunal rulings found that Section 45(5A)
The document discusses taxation issues related to real estate developers and redevelopment projects.
1. It outlines the different stages of real estate development projects and discusses when income should be recognized for tax purposes - whether using the project completion method or percentage completion method.
2. It also discusses whether income from redevelopment projects should be taxed as business income or capital gains for the landowner participating in the project.
3. The document provides an overview of key sections of the Income Tax Act relating to taxation of real estate developers, capital gains, revenue recognition, and the powers of tax authorities to refer cases to valuation officers.
The role of Chartered Accountants (CAs) under the Real Estate Regulatory Authority (RERA) includes:
1) Certifying withdrawal of money from designated project accounts for developers
2) Preparing annual reports on project accounts for statutory auditors
3) Verifying transactions in separate RERA bank accounts as directed by RERA
4) Acting as authorized representatives and providing other services to RERA authorities.
Real Estate (Regulation and Development) Act,2016Venket Rao
To promote efficient & transparent real estate transactions & consumer protection.
Establishment of regulator for regulation & promotion of real estate sector.
Establishing an adjudication mechanism for speedy dispute redressal .
The document summarizes key points of the Karnataka Real Estate (Regulation & Development) Rules 2017. It outlines requirements for project registration such as furnishing annual reports and audited financial statements. For ongoing projects, it requires status disclosures and depositing 70-100% of amounts collected in a separate bank account. It also details provisions for withdrawal of funds, registration extensions, project details to publish online, interest rates for delays and more. A subsequent press note provided clarification on some aspects for ongoing projects and establishment of the regulatory authority.
The document discusses various legal aspects of property transactions in India. It covers topics like agreement of sale, payment schedules, stamp duty, registration, possession, defects, society formation, penalties for builders, and differences between a lease and license. Key points include that an agreement of sale must be registered within 4 months, builders are liable for construction defects for 3 years, and they must form a society within 4 months of selling 60% of flats.
Controversies in taxation of real estate projects & ICDs for real estate deve...Kunal Gandhi
The document discusses the appropriate method of revenue recognition for real estate developers under Indian tax laws. It provides an overview of the completed contract method and percentage of completion method and their tax implications. It also summarizes various judicial pronouncements related to the methods that can be followed by developers and the considerations of tax authorities. The key point discussed is that developers can follow either method for accounting but tax authorities prefer percentage of completion method and the accounting standards need to be considered for tax computation purposes.
The real estate sector has got its own regulator from May 1, 2017, the date when the Real Estate (Regulation and Development) Act, 2016 (RERA) became effective in the entire country. Each state and UT will have its own Regulatory Authority (RA) which will frame regulations and rules according to the Act.
The document summarizes several topics related to taxation of service contracts in India, including:
1) Taxation of joint development agreements and the valuation and point of taxation.
2) Taxability of construction agreements and whether the tax rate should be 40% or 70%.
3) Availability of cenvat credit for unsold units when obtaining an occupancy certificate.
4) Exemptions for government works contracts and changes after April 2015.
5) Unavailability of Form A-2 for sub-contractors working in SEZ units.
6) Application of reverse charge mechanism for manpower vs deliverable contracts.
7) Treatment of contracts that are inclusive of taxes under the partial reverse charge
Critical issues in Real State Sector.pptxpravedgoud1
The document discusses several key issues in the real estate sector under GST regulations. It outlines changes to tax rates for residential and commercial properties, as well as rules around input tax credits for developers, contractors, and land owners. Some of the main issues discussed include valuation methods for determining affordable housing thresholds and commercial space percentages, discrepancies in tax rates for contractors, and eligibility of input tax credits when supply is not a business activity. The document also notes purported advantages of GST that have not necessarily matched reality, such as expectations around price reductions and simplified compliance.
Impact of GST on Real Estate Sector | PresentationTaxmann
Topics Covered in this Webinar:
1. Real Estate Sector in great difficulty
2. Issues under the Real Estate Sector
3. Constitutional Background
4. GST Council
5. Sale of the complex before completion
6. Transactions out of GSTneither goods nor service para 5 of
Schedule III of CGST Act
7. Real Estate Projects
8. Some General Observations
9. Separate accounts for each real estate project
10. Promoter
And, Many More Details.
The document provides an overview of the real estate business in India and discusses various accounting, taxation, and legal aspects. Some key points:
1) The real estate sector is a major contributor to the Indian economy but faces challenges like high costs, regulatory hurdles, and delays.
2) Revenue from real estate development can be recognized using the percentage of completion method or completed contract method under AS-7.
3) Presumptive taxation schemes like section 44AD provide relief for small builders from maintaining books but require following the scheme for 5 years.
4) Conversion of capital assets into stock attracts capital gains tax based on fair market value on the date of conversion, while the difference on sale
No doubt that, rented premises leads to saving of hefty investment cost but that is only one side of the coin and the other side of coin calls for attention towards the legal aspects involved in such decision which are specified through a Commercial Lease Deed.
This document outlines the terms and conditions for allotment of multi-storey flats in Greater Noida, India. Key details include:
- The scheme opens on October 2, 2013 and closes on November 11, 2013, with allotment by draw expected on January 15, 2014.
- Flats range from 1BHK to 3BHK across different sectors, with unit areas and tentative costs provided.
- Additional charges may apply for higher floors or parking. Maintenance will be handled by a resident welfare society after 2 years.
- Reservation quotas are specified for industrial units, farmers, commercial/institutional units, and GNIDA employees.
- Eligibility criteria and required documents are defined for each
Taxation of Damages- "Damages paid for Breach of Contract to attract GST"EquiCorp Associates
Authority for Advance Rulings (AAR) has ruled that payments in respect to non-performance of a contract would be liable for Goods & Service Tax (GST). This view is based on the provisions under the erstwhile Service Tax Law, “agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act” was a declared service under Section 66E(e) of Finance Act, 1994. Similar provision has been incorporated in Central Goods and Services Tax Act, 2017 (CGST Act) also under Schedule II. Under GST law, the taxable event is supply which has been defined widely and includes all forms of supply for a consideration which is made in course of or in furtherance of business. The act of tolerance or agreeing to refrain from an act is treated as supply of service under the CGST Act. As per these provisions there should be an agreement between the parties to either refrain from doing an act, or to tolerate an act/situation or to do an act.
The document discusses the key expectations of consumers from developers and the government regarding real estate projects. Consumers expect developers to ensure timely project management and completion, transparency, affordable facilities, and for the government to provide subsidies, tax relaxations, and facilitate grievance redressal and loans. It also lists common questions consumers have regarding location, approvals, specifications, status updates, construction quality, and addressing delays and issues.
13 development agreement - precautions to be taken by the societyspandane
The document provides a detailed list of over 50 precautions and points that should be included in a development agreement between a housing society and developer for a redevelopment project. Key points to address include clarifying ownership and development rights, specifying construction timelines and member accommodations, obtaining necessary approvals, allocating liability, and including penalty clauses for delays or non-compliance. The agreement should protect the interests of existing members throughout the redevelopment process.
This document summarizes tax implications for construction projects in India. It discusses key income tax provisions, judicial decisions, and Ind-AS accounting standards relevant for joint development agreements. Specifically, it covers how capital gains are taxed, important case law around project possession and completion, and the accounting treatment for revenue and losses over the life of a construction contract.
The document summarizes a lecture given to civil engineering students about the Maharashtra Real Estate Regulatory Authority (MahaRERA) Act 2016. The key points covered in the lecture include an overview of the real estate sector laws in India, the need for the MahaRERA Act, its key definitions, provisions regarding registration of real estate projects and agents, obligations of promoters, and rights of allottees. The lecture aimed to provide an understanding of the important aspects of the new law regulating the real estate sector in Maharashtra.
Commercial Leases, Their Provisions and Pitfalls to Avoid (Series: Real Estat...Financial Poise
Like any other contract, the provisions of a commercial lease are negotiable. Yet, like so many contracts, commercial leases can be confusing to anyone who does not negotiate them for a living. This webinar explains many of the common provisions in a typical commercial lease (e.g. competition clauses, destruction/condemnation provisions, enforcement provisions, escalation clauses, purchase and renewal options, subletting and assignment provisions, use provision- just to name some examples) and discusses what is “market” with respect to them.
To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/commercial-leases-their-provisions-and-pitfalls-to-avoid-2020/
RERA aims to increase transparency and protect home buyers in the real estate sector. It requires developers to register projects and disclose all relevant information to buyers. Key provisions for buyers include maintaining 70% of funds in separate escrow accounts, defining carpet areas, establishing resident welfare associations, and allowing refunds for delays or structural defects. RERA will impact builders by requiring greater financial strength and transparency, while real estate agents must register and disclose all project details to customers. Overall, RERA is expected to benefit the industry through increased regulation and transparency.
This document is an expression of interest from Bhandari Construction and Developers Pvt. Ltd. for their new residential project called BCD Heaven Valley - Phase 1, codenamed BCD North Star. It lists the various unit sizes available from 1 BHK to duplex units and provides the basic and premium pricing. Interested customers must fill out an application form providing their contact and financial details. By submitting the form along with a registration amount, the customer is expressing interest to provisionally book a unit in the project subject to terms and conditions regarding payment plans and timelines to be finalized in the sale agreement.
The document outlines regulations for subdivision and condominium projects in the Philippines according to Presidential Decree 957, including requirements for registration, licensing, project completion, payments, and violations. It establishes the Housing and Land Use Regulatory Board as the regulating agency and grants it exclusive jurisdiction over real estate cases. Key provisions include mandatory registration and licensing of projects and sellers, timelines for completion, rules for advertisements and project alterations, and penalties for non-compliance including revocation of licenses.
The document summarizes recent amendments to Schedule III of the Companies Act that will be applicable for financial statements prepared for FY 2021-22. Key changes include rounding off figures based on total income, classifying non-current assets, disclosing promoter shareholding and short-term borrowings, introducing new disclosure requirements for trade receivables and payables, and capital work-in-progress. Additional regulatory disclosures are also required relating to immovable property, loans to related parties, ratios, benami property, and utilization of funds.
The document discusses various aspects related to the taxation of capital gains in India.
1) Gains from the sale of assets that are not considered capital assets under section 2(14) of the Income Tax Act are not liable to capital gains tax. This includes personal cars and agricultural land.
2) Capital assets are defined as property held by the assessee, excluding certain assets like stock-in-trade. Agricultural land is excluded if it is rural land.
3) Capital gains are classified as short-term or long-term based on the holding period of the asset. Various time periods apply to different types of assets.
4) Exemptions are available under sections 54, 54EC
Integrating Advocacy and Legal Tactics to Tackle Online Consumer Complaintsseoglobal20
Our company bridges the gap between registered users and experienced advocates, offering a user-friendly online platform for seamless interaction. This platform empowers users to voice their grievances, particularly regarding online consumer issues. We streamline support by utilizing our team of expert advocates to provide consultancy services and initiate appropriate legal actions.
Our Online Consumer Legal Forum offers comprehensive guidance to individuals and businesses facing consumer complaints. With a dedicated team, round-the-clock support, and efficient complaint management, we are the preferred solution for addressing consumer grievances.
Our intuitive online interface allows individuals to register complaints, seek legal advice, and pursue justice conveniently. Users can submit complaints via mobile devices and send legal notices to companies directly through our portal.
Safeguarding Against Financial Crime: AML Compliance Regulations DemystifiedPROF. PAUL ALLIEU KAMARA
To ensure the integrity of financial systems and combat illicit financial activities, understanding AML (Anti-Money Laundering) compliance regulations is crucial for financial institutions and businesses. AML compliance regulations are designed to prevent money laundering and the financing of terrorist activities by imposing specific requirements on financial institutions, including customer due diligence, monitoring, and reporting of suspicious activities (GitHub Docs).
More Related Content
Similar to 14-3-2019-Vishnu-Moothy-JDA-Drafting.pdf
Controversies in taxation of real estate projects & ICDs for real estate deve...Kunal Gandhi
The document discusses the appropriate method of revenue recognition for real estate developers under Indian tax laws. It provides an overview of the completed contract method and percentage of completion method and their tax implications. It also summarizes various judicial pronouncements related to the methods that can be followed by developers and the considerations of tax authorities. The key point discussed is that developers can follow either method for accounting but tax authorities prefer percentage of completion method and the accounting standards need to be considered for tax computation purposes.
The real estate sector has got its own regulator from May 1, 2017, the date when the Real Estate (Regulation and Development) Act, 2016 (RERA) became effective in the entire country. Each state and UT will have its own Regulatory Authority (RA) which will frame regulations and rules according to the Act.
The document summarizes several topics related to taxation of service contracts in India, including:
1) Taxation of joint development agreements and the valuation and point of taxation.
2) Taxability of construction agreements and whether the tax rate should be 40% or 70%.
3) Availability of cenvat credit for unsold units when obtaining an occupancy certificate.
4) Exemptions for government works contracts and changes after April 2015.
5) Unavailability of Form A-2 for sub-contractors working in SEZ units.
6) Application of reverse charge mechanism for manpower vs deliverable contracts.
7) Treatment of contracts that are inclusive of taxes under the partial reverse charge
Critical issues in Real State Sector.pptxpravedgoud1
The document discusses several key issues in the real estate sector under GST regulations. It outlines changes to tax rates for residential and commercial properties, as well as rules around input tax credits for developers, contractors, and land owners. Some of the main issues discussed include valuation methods for determining affordable housing thresholds and commercial space percentages, discrepancies in tax rates for contractors, and eligibility of input tax credits when supply is not a business activity. The document also notes purported advantages of GST that have not necessarily matched reality, such as expectations around price reductions and simplified compliance.
Impact of GST on Real Estate Sector | PresentationTaxmann
Topics Covered in this Webinar:
1. Real Estate Sector in great difficulty
2. Issues under the Real Estate Sector
3. Constitutional Background
4. GST Council
5. Sale of the complex before completion
6. Transactions out of GSTneither goods nor service para 5 of
Schedule III of CGST Act
7. Real Estate Projects
8. Some General Observations
9. Separate accounts for each real estate project
10. Promoter
And, Many More Details.
The document provides an overview of the real estate business in India and discusses various accounting, taxation, and legal aspects. Some key points:
1) The real estate sector is a major contributor to the Indian economy but faces challenges like high costs, regulatory hurdles, and delays.
2) Revenue from real estate development can be recognized using the percentage of completion method or completed contract method under AS-7.
3) Presumptive taxation schemes like section 44AD provide relief for small builders from maintaining books but require following the scheme for 5 years.
4) Conversion of capital assets into stock attracts capital gains tax based on fair market value on the date of conversion, while the difference on sale
No doubt that, rented premises leads to saving of hefty investment cost but that is only one side of the coin and the other side of coin calls for attention towards the legal aspects involved in such decision which are specified through a Commercial Lease Deed.
This document outlines the terms and conditions for allotment of multi-storey flats in Greater Noida, India. Key details include:
- The scheme opens on October 2, 2013 and closes on November 11, 2013, with allotment by draw expected on January 15, 2014.
- Flats range from 1BHK to 3BHK across different sectors, with unit areas and tentative costs provided.
- Additional charges may apply for higher floors or parking. Maintenance will be handled by a resident welfare society after 2 years.
- Reservation quotas are specified for industrial units, farmers, commercial/institutional units, and GNIDA employees.
- Eligibility criteria and required documents are defined for each
Taxation of Damages- "Damages paid for Breach of Contract to attract GST"EquiCorp Associates
Authority for Advance Rulings (AAR) has ruled that payments in respect to non-performance of a contract would be liable for Goods & Service Tax (GST). This view is based on the provisions under the erstwhile Service Tax Law, “agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act” was a declared service under Section 66E(e) of Finance Act, 1994. Similar provision has been incorporated in Central Goods and Services Tax Act, 2017 (CGST Act) also under Schedule II. Under GST law, the taxable event is supply which has been defined widely and includes all forms of supply for a consideration which is made in course of or in furtherance of business. The act of tolerance or agreeing to refrain from an act is treated as supply of service under the CGST Act. As per these provisions there should be an agreement between the parties to either refrain from doing an act, or to tolerate an act/situation or to do an act.
The document discusses the key expectations of consumers from developers and the government regarding real estate projects. Consumers expect developers to ensure timely project management and completion, transparency, affordable facilities, and for the government to provide subsidies, tax relaxations, and facilitate grievance redressal and loans. It also lists common questions consumers have regarding location, approvals, specifications, status updates, construction quality, and addressing delays and issues.
13 development agreement - precautions to be taken by the societyspandane
The document provides a detailed list of over 50 precautions and points that should be included in a development agreement between a housing society and developer for a redevelopment project. Key points to address include clarifying ownership and development rights, specifying construction timelines and member accommodations, obtaining necessary approvals, allocating liability, and including penalty clauses for delays or non-compliance. The agreement should protect the interests of existing members throughout the redevelopment process.
This document summarizes tax implications for construction projects in India. It discusses key income tax provisions, judicial decisions, and Ind-AS accounting standards relevant for joint development agreements. Specifically, it covers how capital gains are taxed, important case law around project possession and completion, and the accounting treatment for revenue and losses over the life of a construction contract.
The document summarizes a lecture given to civil engineering students about the Maharashtra Real Estate Regulatory Authority (MahaRERA) Act 2016. The key points covered in the lecture include an overview of the real estate sector laws in India, the need for the MahaRERA Act, its key definitions, provisions regarding registration of real estate projects and agents, obligations of promoters, and rights of allottees. The lecture aimed to provide an understanding of the important aspects of the new law regulating the real estate sector in Maharashtra.
Commercial Leases, Their Provisions and Pitfalls to Avoid (Series: Real Estat...Financial Poise
Like any other contract, the provisions of a commercial lease are negotiable. Yet, like so many contracts, commercial leases can be confusing to anyone who does not negotiate them for a living. This webinar explains many of the common provisions in a typical commercial lease (e.g. competition clauses, destruction/condemnation provisions, enforcement provisions, escalation clauses, purchase and renewal options, subletting and assignment provisions, use provision- just to name some examples) and discusses what is “market” with respect to them.
To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/commercial-leases-their-provisions-and-pitfalls-to-avoid-2020/
RERA aims to increase transparency and protect home buyers in the real estate sector. It requires developers to register projects and disclose all relevant information to buyers. Key provisions for buyers include maintaining 70% of funds in separate escrow accounts, defining carpet areas, establishing resident welfare associations, and allowing refunds for delays or structural defects. RERA will impact builders by requiring greater financial strength and transparency, while real estate agents must register and disclose all project details to customers. Overall, RERA is expected to benefit the industry through increased regulation and transparency.
This document is an expression of interest from Bhandari Construction and Developers Pvt. Ltd. for their new residential project called BCD Heaven Valley - Phase 1, codenamed BCD North Star. It lists the various unit sizes available from 1 BHK to duplex units and provides the basic and premium pricing. Interested customers must fill out an application form providing their contact and financial details. By submitting the form along with a registration amount, the customer is expressing interest to provisionally book a unit in the project subject to terms and conditions regarding payment plans and timelines to be finalized in the sale agreement.
The document outlines regulations for subdivision and condominium projects in the Philippines according to Presidential Decree 957, including requirements for registration, licensing, project completion, payments, and violations. It establishes the Housing and Land Use Regulatory Board as the regulating agency and grants it exclusive jurisdiction over real estate cases. Key provisions include mandatory registration and licensing of projects and sellers, timelines for completion, rules for advertisements and project alterations, and penalties for non-compliance including revocation of licenses.
The document summarizes recent amendments to Schedule III of the Companies Act that will be applicable for financial statements prepared for FY 2021-22. Key changes include rounding off figures based on total income, classifying non-current assets, disclosing promoter shareholding and short-term borrowings, introducing new disclosure requirements for trade receivables and payables, and capital work-in-progress. Additional regulatory disclosures are also required relating to immovable property, loans to related parties, ratios, benami property, and utilization of funds.
The document discusses various aspects related to the taxation of capital gains in India.
1) Gains from the sale of assets that are not considered capital assets under section 2(14) of the Income Tax Act are not liable to capital gains tax. This includes personal cars and agricultural land.
2) Capital assets are defined as property held by the assessee, excluding certain assets like stock-in-trade. Agricultural land is excluded if it is rural land.
3) Capital gains are classified as short-term or long-term based on the holding period of the asset. Various time periods apply to different types of assets.
4) Exemptions are available under sections 54, 54EC
Similar to 14-3-2019-Vishnu-Moothy-JDA-Drafting.pdf (20)
Integrating Advocacy and Legal Tactics to Tackle Online Consumer Complaintsseoglobal20
Our company bridges the gap between registered users and experienced advocates, offering a user-friendly online platform for seamless interaction. This platform empowers users to voice their grievances, particularly regarding online consumer issues. We streamline support by utilizing our team of expert advocates to provide consultancy services and initiate appropriate legal actions.
Our Online Consumer Legal Forum offers comprehensive guidance to individuals and businesses facing consumer complaints. With a dedicated team, round-the-clock support, and efficient complaint management, we are the preferred solution for addressing consumer grievances.
Our intuitive online interface allows individuals to register complaints, seek legal advice, and pursue justice conveniently. Users can submit complaints via mobile devices and send legal notices to companies directly through our portal.
Safeguarding Against Financial Crime: AML Compliance Regulations DemystifiedPROF. PAUL ALLIEU KAMARA
To ensure the integrity of financial systems and combat illicit financial activities, understanding AML (Anti-Money Laundering) compliance regulations is crucial for financial institutions and businesses. AML compliance regulations are designed to prevent money laundering and the financing of terrorist activities by imposing specific requirements on financial institutions, including customer due diligence, monitoring, and reporting of suspicious activities (GitHub Docs).
Business law for the students of undergraduate level. The presentation contains the summary of all the chapters under the syllabus of State University, Contract Act, Sale of Goods Act, Negotiable Instrument Act, Partnership Act, Limited Liability Act, Consumer Protection Act.
Corporate Governance : Scope and Legal Frameworkdevaki57
CORPORATE GOVERNANCE
MEANING
Corporate Governance refers to the way in which companies are governed and to what purpose. It identifies who has power and accountability, and who makes decisions. It is, in essence, a toolkit that enables management and the board to deal more effectively with the challenges of running a company.
Genocide in International Criminal Law.pptxMasoudZamani13
Excited to share insights from my recent presentation on genocide! 💡 In light of ongoing debates, it's crucial to delve into the nuances of this grave crime.
सुप्रीम कोर्ट ने यह भी माना था कि मजिस्ट्रेट का यह कर्तव्य है कि वह सुनिश्चित करे कि अधिकारी पीएमएलए के तहत निर्धारित प्रक्रिया के साथ-साथ संवैधानिक सुरक्षा उपायों का भी उचित रूप से पालन करें।
Receivership and liquidation Accounts
Being a Paper Presented at Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN) on Friday, August 18, 2023.
Receivership and liquidation Accounts Prof. Oyedokun.pptx
14-3-2019-Vishnu-Moothy-JDA-Drafting.pdf
1. DRAFTING OF JOINT
DEVELOPMENT AGREEMENTS
FROM TAX PERSPECTIVE
Vishnu Daya & Co LLP
Chartered Accountants
Address: No. 337, 3rd Floor,
Karuna Complex, Sampige Road,
Malleswaram, Bangalore –
560003.
Phone No:080-23312779
www.vishnudaya.com
2. CONTENTS
Preamble of a JDA
Parties to the JDA
Title tracing
Declarations/Representations
Consideration
Obligations
Taxation and other commercials
Indemnities
Force majeure
3. PARTIES TO THE JDA
Ensure that all the parties who have certain rights in relation to the land join the
JDA;
If it is a Hindu undivided family, ensure that the same is reflected clearly;
Other family members – Preferable to make them parties;
Partnership Firm- All the partners to join the JDA.
Company – Authorised by a Board Resolution
4. TRACING OF TITLE TO THE PROPERTY
Tracing of title is very important
If certain agreements had been entered into by the land owners with third parties which
are subsequently cancelled (registered or unregistered)- it should be brought on record;
If the land owners had executed any POA, the same is required to be cancelled.
A registered agreement can be cancelled through another registered agreement only;
History of family settlement
Whether HUF property or individual property
Public Notice will form part of due-diligence.
5. PREAMBLE TO THE JDA
Trace the transaction history- MOU between the same parties, if any;
Modification of earlier terms through any supplementary arrangements
Existence of any building- should be brought out;
Earlier activities in the land – factory and its closure and settlement of the affairs
of the factory;
Settlement of any claims: Condition precedent to the transaction- justification for
claiming certain expenditure u/s 48?
Settlement of any disputes with the Government.
6. PREAMBLE TO THE JDA
If the intention of the Developer is to develop and hold the building for renting,
even his intention to hold it as a capital asset may be declared in the document.
In such a scenario, the developer should record his work in progress as CWIP and
not as part of the inventory. Otherwise, when the work is completed and it has to
be capitalised, section 28 (via) of ITA may trigger upon completion and
capitalisation.
7. VARIOUS DATES IN THE JDA
Date of JDA
Timeline for conversions, change of land use;
Timeline for applying for plan sanction;
Timeline for obtaining the plan sanction;
Timeline for commencement of work;
Timeline for obtaining commencement certificate;
Timeline for completion of the construction and getting the OC- pre condition
under RERA;
Defect liability period- Five years under RERA
Fix timelines for each of the activities;
8. CORE UNDERSTANDING OF THE JDA
Granting the Development rights;
Entire cost by the Developer;
Quality and timelines;
Authority to develop;
Sharing of Marketing cost- GST will trigger;
Sharing- area sharing or revenue sharing- please specify;
Combination of area sharing and revenue sharing?
9. 53A OF TRANSFER OF PROPERTY ACT
Whether it is required to indicate that the handing over of the possession under the
JDA shall not be considered as a possession as contemplated u/s 53A of the TOP
Act?
GST Act- If we have to claim exemption, we have to argue that this is an
immovable property transaction. If we provide that the possession is not as
contemplated u/s 53A, then, it is not a ‘transfer’ as contemplated under the TOP
Act. This clause could be used under the GST Act against us. Conflict in the
argument between 53A clause and a transaction of immovable property?
This should be sparingly used- required only if the asset is held as an inventory.
10. DECLARATION BY THE LAND OWNER
REGARDING TITLE
Declaration regarding ownership, encumbrances, charges, litigations, payment of
taxes.
Declaration regarding usage restrictions- Raja kaluve, nalas, roadways,
pathways; burial grounds;
Declaration regarding antecedents- no prior agreements; FSI consumption in
another land;
Declaration that the provisions of Benami Transaction Prohibition Act is not
applicable.
11. COVENANTS OF THE OWNER
Stock in trade or capital assets- should declare the current status of holding for
future references;
If it is a capital asset, NOC u/s 281? Declaration that there are no arrears of
income tax and pending proceedings.
12. 80IBA - JOINT RESPONSIBILITIES
Whether land owner is carrying on the business of developing and eligible for deduction u/s
80IBA? If the land is held as an investment, there may be a need to convert into stock in trade.
This will depend upon the facts and JDA clauses- whether the land owner also participates in the
development? Karnataka HC- in the case of CIT Vs Shravani Constructions (2012 22
Taxmann.com 250 Kar) has held that the deduction u/s 80IB (10 ) is not restricted to the building
of the housing project, but it includes developing and building housing project.
Please provide a clear clause providing that the land owner will participate in the following with
veto power to the developer:
Finalisation of plans and designs;
Levelling of land ready for development?
Selection of contractor;
Finalisation of land scaping;
Supervision during the construction and right to highlight defects noted;
Whether the word- ‘Joint’ Development is required to be used in this case?
13. JDA BY FDI COMPANIES
Companies in real estate business cannot sell land as such without development.
Whether they can enter into a JDA with revenue sharing arrangement or area
sharing arrangement?
In a revenue sharing arrangement, can it be construed that they are selling the
UDI?
Safeguard clauses regarding joint responsibilities, developer cannot assign or sell
without development; TDS on the land owner by the customer
14. OBLIGATIONS OF THE LAND OWNER
Should not agree for demolition of the building- otherwise, cost of the building
may not be available u/s 48 of ITA.
Exclude clearly from RERA obligations, labour law regulations;
Re-clarify about the joint participation in the planning, design, but at the cost of
the developer and also structure responsibility of the developer.
15. OBLIGATIONS OF THE DEVELOPER
To get the customer agreement cleared by the land owner- to ensure that the
customer declarations are in line with the JDA terms;
Approvals of land owners regarding designs; specifications; release of Civic
amenities area and selection thereof;
To meet the entire cost of completion, getting the OC; insurance as per section 16
of RERA (title and construction);
• To clear the defect as per the defect liability period under RERA.
16. DECLARATION UNDER RERA AS A
PROMOTER
Whether land owner need to declare himself as one of the promoters?
Registration of the “real estate project” is contemplated under RERA.
Whether there is a need to register a JD project meant for renting by both the
parties and not meant for sale?
17. GST LIABILITY IN A RESIDENTIAL BUILDING
Effective 1st April, 2019, GST in a residential building where the developer would be paying GST
– landowner is likely to be exempted from the payment of GST in respect of Transfer of
Development Rights;
Yet the Developer would be liable for GST in respect of the construction of the building to the land
owners. Whether composition tax is applicable on this? If yes, whether the land owner would be
liable for GST once again when he sells before OC?
Charging of GST by the Developer to the land owner?
Whether input credit can be availed by the developer?
Whether the developer should pass the input credit to the customer? In other words, whether the
land owner can demand the developer to charge the GST net of input tax credit?
Timing of liability of the developer?
18. TIMING OF GST LIABILITY ON THE LAND OWNER AND
DEVELOPER 4/2018
(a) registered persons who supply development rights to a developer, builder, construction company or any other
registered person against consideration, wholly or partly, in the form of construction service of complex,
building or civil structure; and
(b) registered persons who supply construction service of complex, building or civil structure to supplier of
development rights against consideration, wholly or partly, in the form of transfer of development rights,
as the registered persons in whose case the liability to pay central tax on supply of the said services, on the
consideration received in the form of construction service referred to in clause (a) above and in the form of
development rights referred to in clause (b) above, shall arise at the time when the said developer, builder,
construction company or any other registered person, as the case may be, transfers possession or the right in the
constructed complex, building or civil structure, to the person supplying the development rights by entering into
a conveyance deed or similar instrument (for example allotment letter).
19. GST LIABILITY IN RESPECT OF
COMMERCIAL BUILDING
Land owner is liable for GST in respect of transfer of development rights;
Timing of liability? Section 13 (2) – Time of supply- date of issue of invoice or
date on which the supplier receives the payment with respect to the supply or the
date of provision of service. As per explanation 2, date of receipt of payment-
entry in the books or credit to the bank account.
Date of provision of service is not defined. Notification No. 4/2018- can be
resorted. If no unit is sold, cost plus 10%- applying rule 30 may be possible.
20. VALUATION OF SUPPLY BY LAND OWNER
Value on which GST is payable?
- 100% of the guideline value ?
- Guideline value of the proportionate right of land being transferred to the
developer?
- Construction cost? This is more futuristic.
Whether collectible from the Developer?
Section 15 of the CGSTA provides that the value of supply shall be the transaction
value, which is the price actually paid or payable for the supply of services. When
it cannot be determined, one has to resort to valuation rules.
21. VALUATION OF SUPPLY BY LAND OWNER
Rule 27 provides for the valuation of supply of services where the consideration is
not wholly in money. Since in the case of area sharing, consideration is not wholly
in money, this rule will apply, where market value of such supply itself can be the
value of service. Hence, one can go for value of UDS agreed to be transferred to
the developer in an area sharing.
In the case of revenue sharing arrangements, as per entry No.5 of schedule III, one
can take a view that this is a sale of land to the customer along with the developer
as developer is not obliged to give any consideration and it is a case of joint sale
of land and building to the customer.
22. VALUATION OF SUPPLY BY THE DEVELOPER
Valuation rules has to be referred to as section 15 is not clarifying the value.
Rule 27- where the supply of service is for a consideration not wholly in money, open market value
of such supply- whether this can be applied? Open market value- whether based on the first sale or
the sale at the time of completion? Whether one can argue that the contract with the customer is no
comparable because, in the case of construction for the owner, there is no land component being
transferred.
Rule 30- cost plus 10% permissible when all other rules are not applicable.
Definition of ‘continuous supply of service” may not be applicable as in terms of section 2 (33), a
continuous payment obligation is also required to be established which is missing.
23. Indication of consideration in cash and settlement
in kind?
Whether it is important to assign a value to the transfer of development rights?
Whether for capital gains tax, such indication of value in the JDA can help?
Insertion of Section 50D- indicating the value in the JDA may no longer required.
Valuation of services under the GST regulations- in the case of construction of
commercial building meant for leasing- this may be quite useful to minimise the
GST.
Land owner will be clear of the amount payable to the developer also towards the
GST as the consideration is fixed upfront.
24. EXISTING BUILDING AND ITS DEMOLITION
Whether the existing building should be demolished by the land owner or the
developer?
Cost of acquisition/ improvement of the building- can be claimed as a deduction
u/s 48 only if it is transferred;
25. PAYMENT OF MUNICIPAL TAX DURING
THE JDA
Before entering into JDA, Municipal Taxes including betterment
charges, has to be cleared by the Landowner.
Whether any issue if the same is paid by the Developer?
26. CHARGING OTHER COSTS BY THE
DEVELOPER?
Most contentious clause in the JDA and ends up with bad relationship?
Fees payable to obtain various infrastructure facilities to the project;
Deposits payable to obtain the above
Costs to be incurred to create the infrastructure?
GST on the same?
27. REVENUE SHARING CLAUSE
Definition of Revenue?
Exclusions from the Revenue? Revenue attributable to additional FSI/ TDR bought by the Developer?
Timing of payments? Whether proportionate out of the collection from the customer or proportionate out of
free money as per RERA regulations?
Method of payment- daily swipe or periodical payment?
GST on the land owner in a revenue sharing agreement? If we draft the clause properly, there is no transfer of
development rights to the developer, but, both should agree to sell to the customers and agree to share the
revenue.
28. REVENUE SHARING CLAUSE FROM GST
PERSPECTIVE
Implications of composition scheme- input credit is no longer available and it will
form part of the price and land owner will get a share out of the same?
Revenue sharing post completion- price includes the GST input credit reversal?
29. REVENUE SHARING
Whether we should authorise the developer to collect the entire sale consideration and
share with the land owner?
Whether we should indicate that when the developer sells the units, he has to disclose the
land owner portion with the customer or he can show that it is on his own account?
Price parity clause
GST implications in case we show separate consideration to the land owner? Whether
valuation rules or composition rules can apply when the consideration is split between the
land owner and the developer?
30. REVENUE SHARING IN A LLP
ARRANGEMENT?
Sharing of percentage of turnover itself as a share of profit for one of the parties?
Separate share of profit and separate share of loss percentage for the partners?
31. CONSUMPTION OF FULL FLOOR SPACE
INDEX
Obligation of the developer to consume full FSI?
Penalty for under consumption?
Who has to bear the cost of TDR to be loaded and get the benefit of such
additional FSI?
Who has to bear the cost of premium FSI?
32. Transfer of Common Area
As per Section 17 of RERA, the promoter shall execute a registered conveyance deed in favour of
the allottee along with the undivided proportionate title in the common areas to the association of
the allottees or the competent authority, as the case may be, and hand over the physical possession
of the plot, apartment of building, as the case may be, to the allottees and the common areas to the
association of the allottees or the competent authority, as the case may be, in a real estate project,
and the other title documents pertaining thereto within specified period as per sanctioned plans as
provided under the local laws.
Common Area and carpet area does not include exclusive open terrace area and "exclusive balcony
or verandah area. Neither transferred to allotee and Association.
33. Applicability of 56(x) in association hands as the Consideration paid
by allotees?
In the draft agreement issued by RERA authority, land owner is not
included.
In further, draft agreement states the UDS shall be transferred to
allottee contradicting to section 17 of RERA Act.
Transfer of Common Area
34. TDS U/S 194IA OR 194IC OR NO OR BY THE
CUSTOMER DIRECTLY?
TDS by the transferee to a resident transferor;
If the land owner is a non resident, section 195 would apply;
Cash consideration is covered under this section;
In a revenue sharing arrangement, whether developer is paying the consideration
to the land owner when he shares the revenue? Is he giving as an agent or on own
account?
35. 194IC- TDS 10%
Notwithstanding anything contained in section 194IA, any person responsible for paying to a resident any
sum by way of consideration, not being consideration in kind, under the agreement referred to in sub section
(5A) of section 45, shall be at the time of credit of such sum to the account of the payee or at the time of
payment thereof in cash or by issue of a cheque or draft, whichever is earlier, deduct an amount equal to 10%
of such sum.
‘Specified agreement’ means a registered agreement in which a person owning land or building or both
agrees to allow another person to develop a RE project on such land or building or both, in consideration of a
share, being land or building or both in such project, whether with or without payment of part of the
consideration in cash.
Term used is ANY PERSON, while, in section 45 (5A), only individual or HUF? Whether this has enlarged
the scope? If the owner is a firm or a LLP or company, whether this section is applicable?
Only area sharing agreement is covered in the definition of ‘specified agreement’ u/s 45 (5A). Hence, whether
revenue sharing agreement without any area sharing is not a specified agreement?
36. TDS BY THE CUSTOMER DIRECTLY
• Can the TDS be done by the ultimate customer directly in the name of land owner
and developer proportionately?
• This would avoid multiple queries on turnover of the developer from the project;
no payment of consideration by the developer to the land owner;
• Project account- should there be separate account for the land owner?
• If it is a joint escrow account (100%), whether this can be complied with?
37. SHARING OF MARKETING COST AND GST
IMPLICATIONS
In a revenue sharing arrangement, if the landowner is required to share part of the
marketing cost, then, there will be a GST chargeable by the developer to the land
owner and land owner will not get any input credit. Hence, may be avoided.
38. MAINTENANCE COST- ITS COMMENCEMENT AND
TIMELINE OF PAYMENT
Clarity regarding the commencement of maintenance charges by the land owner;
Quantum- normally, developer collects 12 months or 24 months advance amount
from their customers. However, land owner can retain a right to pay on a
periodical basis in case he retains the units.
In the case of units, the land owner should enable the developer to collect from his
customers directly.
To pay periodically and not in lump sum
39. CORPUS FUND, PAYMENT AND TIMELINES?
Corpus fund collected by the developer for the project which is subsequently
required to be transferred to the Association- GST liability when it is collected by
the Developer?
This may be liable as it is not refundable to the customer, but to be transferred to
the Association. Hence, it is advisable for the Association to collect and not the
developer. This clarity may be provided in the JDA itself.
40. COMPENSATION FOR DELAYS?
Compensation for intermediary delays for change of land use; plan sanctions,
commencement certificate and completion?
Compensation will attract GST;
Whether compensation is an income or a capital receipt?
If compensation is waived subsequently in lieu of certain give and take? GST may
be still leviable and income tax also may be leviable?
As per section 15 (2 ) (d), interest or late fee or penalty for delayed payment of
any consideration for any supply shall be included in the value of supply. As per
section 13 (6), it is taxable only when received.
41. SPECIFICATIONS OF THE PROJECT
Clear elaborated specifications;
Developer giving extra amenities to his customers and not to the land owner units?
Specifications in a commercial building- developer may or may not go for a
flooring of his area;
Specifications for common amenities in the commercial building?
Electricity capacity in land owner portion?
Height of each floor in a commercial building- crucial from renting perspective.
42. PAYMENT OF SUM BY THE DEVELOPER
Refundable amount and time of repayment?
Interest on delayed repayment- whether GST will apply?
Non refundable amount? TDS?
Non refundable amount and computation of consideration in the hands of the land
owner? Whether it is subsumed within the valuation of section 50D or it has to be
added further?
Subsequent conversion of refundable amount to non refundable amount?
43. MORTGAGE CLAUSE
Developer’s right to mortgage;
Utilisation of loan funds;
Repayment?
Utilisation of sale proceeds- whether restriction to use in the project only should
be insisted?
Deposit of title deeds;
Land owner’s right to mortgage;
Appointment of a trustee or escrow agent?
Mortgage clauses versus inventory meant for sale argument?
44. FORCE MAJEURE CLAUSE
Definition;
Inclusion and exclusions- shortage of materials, lorry strikes; labour shortage?
Government delays?
Delays due to the title issues during the project?
Notification of such events between the parties on a periodical basis?
Whether reduction of GDP below 2% can be a force majeure?
45. TITLE INSURANCE AND INDEMNITIES
Under section 16 of the RERA, taking a title insurance for the land and
construction is mandatory;
Determine whether this will be arranged by the developer or the land owner and
provide for the same;
Indemnities from the claims of customers under RERA regarding quality and
delay in completion;
Even though registered as a promoter, clear clarity under the JDA regarding all the
obligations of completion of the project and indemnity against any such claims;
Indemnity from the claims arising out of construction and development works.
46. STAMP DUTY CLAUSE
Clear clarity about the liability;
Stamp duty on the JDA
Stamp duty on owners area;
Stamp duty on developer’s area;
Stamp duty on any subsequent documents to be executed consequent to the JDA-
say- sharing agreement?
Whether sharing agreement has to be registered?
47. STRUCTURING FOR THE LAND OWNER?
50D VERSUS 45 (5A)?
Conversion into stock in trade?
Contribution to a Firm or LLP?
Gifting within the family members and creating multiple rights- GAAR?
Revenue sharing versus area sharing?
Initially to go for revenue sharing and conversion thereof into an area sharing
upon completion of a commercial building by having a partition of the property?
48. JDA- SALE OF UNITS BY THE LAND
OWNER- WHETHER LTCG OR STCG?
When an apartment is sold- the land owner would be selling the UDS and the unit;
UDS RETAINED- computation of indexed cost based on the date of purchase;
Building- whether short term or long term asset? What is the date of acquisition- whether on the
date of JDA or date of sharing agreement or date of completion and receipt of possession?
Gulshan Malik vs CIT (43 Taxmann.com 200), Delhi High Court has held that a right on the
apartment crystalises on the date of entering into an agreement to purchase.
Clause in the sharing agreement- allocation and declaration of right of both the parties- that they
have absolute right to dispose off.
Land owner should assign his right on the building and period of holding can be reckoned from the
date of sharing agreement.