450
June 29 To July 5, 2019 u Taxmann’s Corporate Professionals Today u Vol. 45 u 38between the owner of immovable property
and the developer triggers the capital gains
tax liability in the hands of the owner in the
year in which the possession of immovable
property is handed over to the developer for
development of a project.
With a view to minimise the genuine hardship
which the owner of land may face in paying
capital gains tax in the year of transfer, it is
proposed to insert a new sub-section (5A) in
section 45 so as to provide that in case of an
assessee, being individual or Hindu undivided
family, who enters into a specified agreement
for development of a project, 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.
It is further proposed to provide that the
stamp duty value of his share, being land or
building or both, in the project on the date
of issuing of said certificate of completion
as increased by any monetary consideration
received, if any, shall be deemed to be the
full value of the consideration received or
accruing as a result of the transfer of the
capital asset.
It is also proposed to provide that benefit
of this proposed regime shall not apply to
an assessee who transfers his share in the
project to any other person on or before the
date of issue of said certificate of completion.
It is also proposed to provide that in such
a situation, the capital gains as determined
under general provisions of the Act shall be
deemed to be the income of the previous
year in which such transfer takes place and
shall be computed as per provisions of the
Act without taking into account this proposed
provisions.
It is also proposed to define the following
expressions “competent authority”, “specifiedagreement” and “stamp duty value” for this
purpose.
It is also proposed to make consequential
amendment to section 49 so as to provide
that the cost of acquisition of the share in
the project being land or building or both,
in the hands of the land owner shall be
the amount which is deemed as full value
of consideration under the said proposed
provision.
These amendments will take effect from 1st
April, 2018 and will, accordingly, apply in
relation to the assessment year 2018-19 and
subsequent years.”Concluding Remarks
3. Though the intention, as expressed above,
was “to minimise the genuine hardship which
the owner of land may face in paying capital
gains tax in the year of transfer” why were
assessees, other than individuals and HUFs
left out? Whereas exemptions provided under
sections 54 and 54F are applicable only to
individuals and HUFs, there is no such
restriction so far as applicability of provisions
of section 54EC is concerned. As observed
earlier, capital gain provisions as contained in
the opening paragraph of section 45, subject
to exemptions provided in other sections, are
applicable to all assessees. Then why single
out other assessees by subjecting them to
“continuous hardship”?
So, it is submitted that whatever may have
been the intention of the legislature when this
section was introduced, let there a suitable
amendment to section 45(5A) by including
other assessees also under the category of
extending “options” to them also to solve
their problems also.
lllCAPITAL GAINS ON JDAs IN CASE OF ASSESSEES OTHER THAN INDIVIDUALS & HUFs