Question ID : 39333

JDA

JDA AGREEMENT ENTERED INTO IN 2013.LANDLORD GOT SAY,20 LACS AS SECURITY DEPOSIT AND SHOWN AS LIABILITY IN B/SHEET. IN 2018,PROMOTER AND LANDLORD ENTERED INTO SEPARATE AGREEMENT TO SALE OUT LANDLORD`S PORTION FOR CONSIDERATION OF SAY RS 2 CR. AND RECEIVED RS 5 LACS IN FY 2018-19 AS PART PAYMENT. LANDLORD DOES NOT HAVE GST NUMBER. WHAT WILL BE THE INCOME TAX & GST IMPLICATION IN THE BOOKS OF LANDLORD ??

Hi Mr. Sudip, My answer below is with respect to income tax as I am specializing in it. 1. As per the available information, it would be first required to analyse whether the activities of the landlord is a business activity and hence, sale of his portion would fall under business income. 2. In case, landlord is not carrying business but holding the land as capital asset, capital gains would trigger on JDA transaction under pre-amendment (please refer section 45(5A) for the amendment) regime as the agreement is entered in 2013. 3. For determining the year of transfer and computation of capital gains, various facts are required to be pursued to arrive at the conclusion. Thanks and Best Regards,