JDA landowners beyond individuals: HUFs, heirs, NRIs, firms and companies

This is Part 3 of a six-part study of how income tax treats joint development agreements. Part 1 asks whether a JDA is a transfer and in which year the landowner is taxed, including section 45(5A) in full. Part 2 covers how much is taxed, at what cost, the exemptions and the sale of the flats received. Part 3 takes the family and business landowners who are not a plain resident individual. Part 4 covers trusts, societies, agricultural, leasehold, new-tenure and Town Planning Scheme land. Part 5 is the developer’s side. Part 6 covers tax deduction at source, searches, reassessment and the move to the Income-tax Act, 2025. The redevelopment of existing buildings is covered separately in the developer series, its Part 2 and Part 3, and the member series: transfer and cost, hardship and corpus, exit and resale and tenants, slums, shops and societies.

Section 45(5A) is a privilege of status. It defers the landowner’s gain to the year the completion certificate issues, values it on that date, and lets the owner pay when he has his flats, but only where the gain “arises to an assessee, being an individual or a Hindu undivided family”, from land or building held as a capital asset, under a registered agreement. Every other landowner who signs the same agreement with the same developer for the same plot is taxed under the general rule: in the year the land is transferred under section 2(47), on a value the statute does not fix, often years before any flat exists.

That makes the first question in every file a question of status and character, not of timing: who owns the land, and does that owner hold the land as an investment or as stock in trade?

Key points

• Section 45(5A) (section 67(14) of the 2025 Act) applies only to an individual or an HUF transferring land or building held as a capital asset. Residence does not matter, so a non-resident individual qualifies.
• An HUF qualifies, but only if the agreement is signed in its name through the karta: capacity in the document decides status in practice (K.R. Lakshmi, Bangalore, 2017).
• Partition or death between the agreement and the certificate is undecided under section 45(5A); the safer reading keeps the gain with the original transferor (the HUF until a total partition is recorded under section 171; the deceased through section 159, or his executor under section 168 while the estate is administered), though a recorded total partition weakens it.
• Co-owners are taxed share by share unless they act together as an association of persons; Part 4 decides it for pooled plots (N.P. Bagwan, Bangalore, 2016, ex parte, against the owners; Jawahar N. Ghia, Mumbai, 2013, for co-owners who signed individually).
• A non-resident is paid under section 195 (section 393(2), Table serial 17, of the 2025 Act), not section 194-IC, and has no 23 July 2024 comparison; the USA and UK treaties leave the gain to Indian domestic law and the UAE treaty gives India the right to tax it.
• Land held as stock in trade is outside section 45(5A) altogether. After a section 45(2) conversion the capital gain is frozen at conversion value, and both it and the business profit are charged when the stock is sold or otherwise transferred; the Pune Tribunal in Vilas Rukari (2018) placed that at completion, and L.K. Trust (Bangalore, 2026) taxed the year of receipt where no one disputed it.
• Firms, LLPs and companies are taxed in the year of transfer, at 12.5 per cent without indexation from 23 July 2024, with section 54EC as the only reinvestment relief; a partner’s contribution of land to a developing firm is charged under section 45(3) on the book value recorded.
• A company’s MAT follows its books, not its tax year; a mismatch can make it pay MAT on the JDA in one year and normal tax in another.

Which landowners this Part covers, and the four questions that decide each

Every landowner in this Part is answered by four questions, asked in order: is the owner an individual or an HUF; is the land a capital asset or stock in trade; in whose name and capacity is the agreement signed; and is the owner resident? The first two decide whether section 45(5A) can apply at all; the third decides who the assessee is; the fourth decides withholding under section 194-IC or section 195, the 23 July 2024 comparison and treaty relief.

Status. Section 45(5A) opens “Notwithstanding anything contained in sub-section (1), 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 definition of a specified agreement, by contrast, speaks of “a registered agreement in which a person owning land or building or both, agrees to allow another person to develop a real estate project”, so the agreement can be a specified agreement even when some of its signatories cannot use the deferral. A JDA signed by an individual and a company as co-owners is one agreement; the individual’s share is within section 45(5A) and the company’s is not.

Character. The sub-section needs “a capital asset, being land or building or both”. Land held as stock in trade is not a capital asset, so a proprietor, a land dealer or an individual developer who holds the plot as inventory is outside the section even though he is an individual. The Pune Tribunal observed as much at paragraph 10 of Rakesh Motilal Sharma v. ACIT (ITA 1256/PUN/2025, 18 June 2026), where an individual’s 2018 agreement with Ajmera Percept Realty concerned land that was “admittedly stock in trade”, and at paragraph 11 remitted every issue to the Commissioner (Appeals).

The table assumes a capital asset unless the row says otherwise.

Landowner	Section 45(5A)	Year of charge	Long-term rate on a transfer from 23 July 2024	Section 54 or 54F	Section 54EC	Withholding on cash
Resident individual or HUF, capital asset	Yes	Completion certificate year	12.5 per cent, capped by the 20 per cent indexed comparison for land acquired before 23 July 2024	Yes	Yes	s.194-IC, 10 per cent
Co-owners and co-heirs (individuals)	Yes, share by share	Certificate year for each	As above	Yes, each on his own facts	Yes	s.194-IC on each payee
Pooled owners held to be an AOP	No	Year of transfer, s.2(47)	12.5 per cent; maximum marginal rate if shares indeterminate	No	Yes	Disputed
Minor’s land	Yes (the minor is an individual)	Certificate year; clubbed in the parent	As for the parent	Tested on the minor	Yes	s.194-IC in the minor’s name
Non-resident individual	Yes	Certificate year	12.5 per cent, no comparison	Yes	Yes	s.195, rates in force
Individual holding land as stock	No	Year the stock is sold or otherwise transferred	Business income at slab rates	No	No	Disputed
Firm or LLP	No	Year of transfer	12.5 per cent	No	Yes	Disputed
Company	No	Year of transfer	12.5 per cent; MAT on book profit	No	Yes	Disputed

The “disputed” entries are the question whether section 194-IC, which applies to the agreement “referred to in sub-section (5A) of section 45”, reaches a payee to whom that sub-section cannot apply. Part 6 decides it; the developer’s safe course where a firm or company is paid is discussed there.

Hindu undivided families: the karta, the coparceners and partition

An HUF is within section 45(5A) by name, so a family that owns land as joint family property and signs a registered JDA through its karta is taxed in the year of the completion certificate on the stamp duty value of its share plus money received, exactly as an individual is.

Who signs, and why the document decides status

The HUF, not the karta personally, is “a person owning land”, and the Tribunal decides status from the document. In K.R. Lakshmi v. ITO (ITAT Bangalore, ITA 503/Bang/2017, 28 April 2017) five co-owners signed a 2006 development agreement with Latitude Projects for a 50 per cent undivided share; one claimed afterwards that the land was HUF property, relying on purchases of 1959 and 1962 and a family memorandum of 2002. The Bench rejected it at paragraph 6: “There is no dispute that the JDA dt.11.7.2206 [sic] was signed by the co-owners of the land in their individual capacity. There is no mention of the ownership of the land belongs to HUF either in the JDA or in any other document.” The Hyderabad Tribunal reached the same result in Late Rajesham Ragi v. ITO (ITA 776/Hyd/2025, 10 April 2026), an appeal carried on by the heirs: legal title stood with the individual members and the partition was only a division among them, so the income was theirs, not the HUF’s (paragraph 8).

In Hemanth Puttannachetty Viswanath v. ITO (ITAT Bangalore, ITA 3240/Bang/2018, 8 September 2021) the Assessing Officer decided that a Bengaluru property divided by a registered partition deed of 1983 was still HUF property, valued the two flats the assessee received under a 2014 agreement at Rs 4,158 per square foot, denied section 54F because two flats came, and assessed the individual only protectively, never making a substantive assessment on the HUF. The Bench held at paragraph 13 that “Without a substantive assessment, protective assessment will have no meaning”, and sent everything back.

The case that shows how a status error is corrected is ACIT v. N.G. Balu Reddy (HUF) (ITAT Bangalore, ITA 651/Bang/2020, 21 December 2021). The land belonged to the HUF of a husband who had died by the time his widow signed the 2004 agreement with SJR Builders in her own name. The Commissioner (Appeals) annulled her individual assessment because the property had devolved on the succeeding HUF of herself and her minor children, and the Assessing Officer then reopened the HUF. The Bench upheld the reopening, relying on ITO v. Bachu Lal Kapoor (Supreme Court, as quoted) that while an HUF exists its income cannot be assessed on the members (paragraphs 22 to 24). A reader must hold that order alongside N.G. Chandra Reddy (HUF) v. DCIT (ITAT Bangalore, ITA 390/Bang/2015, 20 July 2016), which concerned the same 2004 SJR Builders agreement and held it a transfer in the agreement year, while Balu Reddy held it was not, because clause 4 said the possession was not part performance, only a refundable deposit had been paid and, with no sanctioned plan, the developer was not shown willing to perform, and taxed the year the flats came (paragraphs 27 to 41). The two Benches decided the same JDA in opposite ways on timing; neither should be cited alone.

Partition before the agreement

A partition before the JDA is the clean case. Each coparcener takes his allotted land on a distribution to which, by section 47(i), nothing in section 45 applies (“any distribution of capital assets on the total or partial partition of a Hindu undivided family”; section 70(1)(a) of the 2025 Act). His cost is the family’s under section 49(1)(i), and Explanation 1(i)(b) to section 2(42A) adds the family’s holding period. Each then signs as an individual and section 45(5A) applies to each separately.

The trap is a partial partition. Section 171 of the 1961 Act provides that a family “hitherto assessed as undivided shall be deemed for the purposes of this Act to continue to be a Hindu undivided family, except where and in so far as a finding of partition has been given under this section”, and a partial partition made after 31 December 1978 among members of a family “hitherto assessed as undivided” is not recognised: section 171(9)(b), and section 315(8)(b) of the 2025 Act in the same words, provide that the family “shall continue to be liable to be assessed under this Act as if no such partial partition had taken place”. A family that carves one plot out by a partial partition shortly before the JDA, so that three brothers can each claim section 54F, invites the Revenue to say the gain is still the HUF’s. The brothers’ answer is that section 171 governs the assessment of the family’s income, not whose capital asset a separately conveyed plot is; but where the land was never conveyed and the only change is a memorandum, the Revenue’s reading is the more natural one.

The opposite plan, a member throwing his self-acquired plot into the family’s common stock shortly before the JDA, meets section 64(2) (section 99(3) of the 2025 Act). Where, after 31 December 1969, separate property has been converted into family property “through the act of impressing such separate property with the character of property belonging to the family or throwing it into the common stock of the family”, “the income derived from the converted property or any part thereof shall be deemed to arise to the individual and not to the family”, and on a later partition the income from the share his spouse receives is clubbed in his hands too (section 64(2)(b) and (c)). The family can argue that a capital gain arises from transferring the property, not from the property itself; the Revenue answers that Explanation 1 extends “property” to “the proceeds of sale thereof” and to any property into which it is converted, which reaches the flats. No JDA decision was traced.

Partition after the agreement and before the certificate

This is the question families actually face, and no decision on it was traced. The HUF signs a registered agreement in 2023; the karta dies or the brothers fall out in 2025; the completion certificate issues in 2027.

The Revenue’s reading starts from the text. Section 45(5A) charges “the capital gain” that “arises to an assessee, being … a Hindu undivided family, from the transfer … under a specified agreement”. The transfer was the HUF’s; the sub-section only moves the year. Section 171 then decides whether the family is still there to be assessed. A family “hitherto assessed as undivided” is deemed to continue until a finding of partition is recorded (section 171(1)), so without a finding the HUF returns the gain. The Revenue’s difficulty is a total partition recorded before the certificate year. Section 171(4) and (5) assess the family only on its income up to the date of partition or of the previous year in which it fell, section 171(6) only recovers tax on income already assessed on the family, and section 171(7) limits each member’s several liability to the property allotted to him; none of them assesses a family found to be totally partitioned on a gain charged in a later year.

The members’ reading is that what the family held after signing was a right to receive its share in the project, that the distribution of that right on partition is a transfer to which, by section 47(i), nothing in section 45 applies, and that each member steps into the family’s shoes, so that when the certificate issues the gain on his portion is his. Its weakness is that section 45(5A) does not tax the receipt of flats; it taxes the gain from the transfer of land, already made by the HUF.

Whether the partition triggers the proviso to section 45(5A), which applies where “the assessee transfers his share in the project on or before the date of issue of the said certificate”, is also open. Section 47 does not say a partition is no transfer; it says “Nothing contained in section 45 shall apply to the following transfers”. The members read that as switching off the whole of section 45, the proviso included; the Revenue can read the proviso as triggered by the family’s transfer of its share, which would move the agreement gain into the partition year. Practically, the family should keep the HUF’s permanent account number alive and record in the partition deed who bears that tax.

Co-owners, spouses and co-heirs: share by share, or an association of persons?

Co-owners are taxed share by share, each on his own undivided interest, unless they do something together that makes them an association of persons, which is not “an individual or a Hindu undivided family” and loses section 45(5A) entirely. Part 4 decides the association question for owners who pool plots, with Jawahar N. Ghia (ITAT Mumbai, 19 November 2013) for the owners and N.P. Bagwan (ITAT Bangalore, 30 June 2016) for the Revenue; this Part takes what is particular to families.

Why co-owners are separate assessees

Co-owners’ gains are assessed separately because each co-owner’s capital asset is his own undivided share, and because co-ownership without more is not an association: the Supreme Court’s test in M.M. Ipoh v. CIT (26 July 1967, (1968) 67 ITR 106), quoting CIT v. Indira Balkrishna, is whether the persons “join in a common purpose or common action”. Inherited land is the usual family case, and the heirs have won it. In CIT v. Gool C. Dalal (Kerala High Court, 26 October 1989, [1990] 184 ITR 248) two sisters who inherited forest land under their brother’s will, leased it out jointly and then sold it were not an association; the Court, applying its earlier Division Bench rulings, said at paragraph 8 that “It is essential that the persons must join in a common purpose or common action and the object of the association must be to produce income”, the second limb being the one the Explanation to section 2(31) now displaces. In CIT v. Deghamwala Estates (Madras High Court, 13 March 1979, [1980] 121 ITR 684) two brothers who had inherited and sold house sites at Sidhpur, in Mehsana district, with three other co-owners were held not to be a body of individuals, because “a mere execution of a sale deed by the two brothers together … was not enough to constitute an association. It would not be enough to constitute a body” (paragraph 26); an earlier reference between the same parties had already held them not an association of persons (paragraph 2).

Spouses as co-owners

A plot bought in the joint names of husband and wife is two shares, and each spouse is an individual within section 45(5A). Section 64(1)(iv) includes in an individual’s income what arises to the spouse “from assets transferred directly or indirectly to the spouse by such individual otherwise than for adequate consideration”, so where the husband paid for both halves the Revenue will compute the wife’s gain under section 45(5A), in the certificate year, and include it in his income. Where she paid from her own income or inherited her half, the gain stays hers. The purchase deed, the bank trail and any gift deed decide it, and should be assembled before the agreement is signed. No JDA decision on the point was traced.

Co-heirs with unsettled shares

Each heir’s share is fixed by the personal law of succession, not by the revenue record, and the Ahmedabad Tribunal applies that. In Popatbhai Dhanjibhai Patel v. ITO (ITAT Ahmedabad, ITA 1453/Ahd/2017, 24 February 2023), where nine co-owners sold land at Gota, the Bench accepted that the assessee’s share was one-twelfth under Hindu succession, not one-ninth (paragraph 9). Where shares are disputed when the JDA is signed, each heir is taxed on the share finally established, and a family settlement recognising antecedent title is not a transfer (family arrangement). The Revenue’s point is the heir who takes more area than his legal share: on its case the excess passes from another heir and is a transfer by that heir or, in the receiving heir’s hands, income under section 56(2)(x), though that section does not apply to a receipt “from any relative” (a brother or sister is one) or “by way of inheritance”, which covers most families.

When the landowner dies: before the agreement, before the certificate, and after it

A landowner’s death changes who returns the gain and who owns the flats, but on the Revenue’s reading, which the heirs contest (open question 2), it does not change whose gain it is: a gain from the deceased’s own transfer is assessed on his legal representative under section 159, and only a transfer made by the heirs themselves is theirs. The answer depends on when the death falls against two dates: the agreement and the completion certificate.

The statute. Section 159(1) makes the legal representative “liable to pay any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased”. Section 159(2)(b) allows “any proceeding which could have been taken against the deceased if he had survived” to be taken against the legal representative, and section 159(3) deems him an assessee, with liability limited by section 159(6) to what the estate can meet. Section 302 of the 2025 Act carries the same words. An heir who inherits takes the deceased’s cost under section 49(1)(iii)(a), “by succession, inheritance or devolution”, and his holding period under Explanation 1(i)(b) to section 2(42A).

Death before any agreement. The heirs own the land and sign as individuals, or through an executor. Each heir is an individual within section 45(5A), taxed on his own share in the certificate year, with the deceased’s cost or the 1 April 2001 value and the deceased’s holding period. Whether an heir’s land is “acquired before the 23rd day of July, 2024” for the comparison in the second proviso to section 112(1)(a) by reference to the deceased’s acquisition is not settled; Part 2 deals with it.

Death after a JDA outside section 45(5A). Where the agreement is unregistered, signed before 1 April 2017, or signed by a co-owner who is not an individual, the transfer (if any) took place in the agreement or possession year under section 2(47)(v), during the deceased’s lifetime, and the gain is assessed on the legal representative for that year. The Assessing Officer cannot move it to the year flats are delivered after death. In Banaswadi Chinnappa Anitha v. DCIT (ITAT Bangalore, ITA 2080 and connected appeals/Bang/2025, 27 August 2026) family co-owners, some represented by legal representatives, had signed a registered JDA and power of attorney in 2005; the Bench held the gain belonged to assessment year 2005-06 because “there was a transfer during the A.Y. 2005-06” (paragraph 33) and that section 45(5A) “is not a retrospective amendment” (paragraph 38), and allowed the deceased owners’ appeals with the rest.

Death after a registered JDA and before the certificate. No decision on this was traced. On the text the Revenue’s reading is the stronger: section 45(5A) is a timing rule for a gain that “arises to an assessee, being an individual” from his transfer “under a specified agreement”. The transfer was the deceased’s; the certificate year is the year of charge; section 159(2)(b) lets the Assessing Officer take against the legal representative the proceeding that “could have been taken against the deceased if he had survived”.

The heirs’ reading is that what the deceased held at death was a right to receive his share in the project, which passed by inheritance (not a transfer), and that a deemed income for a previous year beginning after death is not obviously “the income of the deceased” that section 159(2) speaks of; on that view the heirs bear the charge, or no one does. Its weakness is that section 45(5A) relocates “the capital gain” from the deceased’s transfer; it does not create a new transferor.

A third route applies where a will is being administered when the certificate issues. Section 168(1) makes “the income of the estate of a deceased person” chargeable “in the hands of the executor”, as an individual where there is one executor and as an association of persons where there are more (section 312(1) of the 2025 Act). The Revenue can assess the certificate-year gain on the executor under it; the estate can answer that the gain is the deceased’s own, relocated by section 45(5A), and belongs under section 159. With two or more executors the assessee is an association of persons, which section 45(5A) does not name, and how the sub-section then works is untested. No decision was traced.

Three practical points follow. First, on the stronger reading there should be one return only: the legal representative’s, or the executor’s under section 168 while the estate is under administration, and not the heirs’ as well; protective assessments on both are likely otherwise. Second, the developer’s section 194-IC deductions on cash paid after death will sit in the heirs’ permanent account numbers unless the legal representative’s is used, and the credit must then be reconciled; Part 6 explains the credit rule. Third, the proviso to section 45(5A) applies where “the assessee transfers his share in the project on or before the date of issue of the said certificate”; devolution on death is not a transfer by the assessee, so death does not trigger it. A sale of the share by the heirs before the certificate is their own transfer of an inherited asset; whether it also triggers the proviso on the deceased’s gain is open.

Death after the certificate. The gain is the deceased’s, of the certificate year, returned by the legal representative. The flats pass to the heirs with the section 49(7) cost (the deemed full value, cash included) and, through section 49(1)(iii)(a) and Explanation 1(i)(b) to section 2(42A), the deceased’s holding period.

Minors: whose income, and tested on whose facts

Land owned by a minor, received by gift, inheritance or partition, is the minor’s capital asset, and the minor is an individual within section 45(5A); the gain is computed as the minor’s and then included in a parent’s income under section 64(1A). The Department’s text reads: “In computing the total income of any individual, there shall be included all such income as arises or accrues to his minor child”, excluding a child with a disability of the kind in section 80U and income from manual work or skill, and, where the parents’ marriage subsists, in the income of “that parent whose total income (excluding the income includible under this sub-section) is greater”. Section 99(1)(c) of the 2025 Act is the counterpart. No decision on a minor’s land under a JDA was traced.

Three consequences follow. The exemptions are tested on the minor: section 64(1A) includes “such income as arises or accrues to his minor child”, which is the child’s income computed under the Act, so whether the child owns another house decides section 54F, not whether the parent does. The Revenue may argue the contrary from the inclusion in the parent’s income, but the text does not support it. Second, minority is tested in the year the income is chargeable. Section 45(5A) makes the gain income “of the previous year in which the certificate of completion … is issued”, so a child who turns eighteen before that year is assessed in his own right; the Revenue’s counter, that the income arises on the transfer under the agreement and is merely charged later, is weaker on the words. Third, withholding: section 194-IC tax on cash paid to the minor is deducted in the minor’s name, while the income is assessed in the parent’s, and the credit must follow the income.

A natural guardian cannot, without the court’s previous permission, “transfer by sale, gift, exchange or otherwise” any part of a Hindu minor’s immovable property (section 8(2) of the Hindu Minority and Guardianship Act, 1956), and a disposal in breach “is voidable at the instance of the minor” (section 8(3)), so its date can matter to whether there was a transfer under section 2(47) at all. Where the minor is a coparcener and the karta signs for the HUF, the position is the HUF’s.

Non-resident landowners: the same charge, different withholding, no comparison

A non-resident individual is taxed under section 45(5A) exactly as a resident is, because the sub-section turns on status, not residence; what changes is the withholding section, the rate comparison and the treaty question.

Withholding: section 195, not section 194-IC

Section 194-IC applies only to a payment to a resident, so cash paid to a non-resident landowner falls under section 195 (section 393(2), Table serial 17, of the 2025 Act), deducted when the sum is paid or credited even though section 45(5A) charges the gain only in the certificate year. Part 6 decides the rate, the lower deduction certificate and the payer’s obligations. One point belongs to the landowner and is undecided: area received in kind is not a “sum”, so he can argue that the flats are outside section 195 altogether.

Rate: no 23 July 2024 comparison

A non-resident individual’s long-term gain on land or building is taxed under section 112(1)(c): 20 per cent for a transfer before 23 July 2024 and 12.5 per cent for one on or after it. The second proviso to section 112(1)(a), which caps a resident individual’s or HUF’s tax at the old 20 per cent indexed figure for land acquired before 23 July 2024, is confined to clause (a) and is not available.

That gives the non-resident a stake in a question residents can usually ignore: the date of “transfer”. The rate clauses turn on a “transfer which takes place” before or after 23 July 2024, while section 45(5A) moves the year of charge. If the registered JDA with possession is the transfer and was signed before 23 July 2024, the non-resident can argue for 20 per cent with indexation to the agreement year; if the certificate date governs, he pays 12.5 per cent without.

Treaties: what the text says

No decision applying a treaty to a landowner’s JDA gain was traced.

The India-USA convention has no immovable property paragraph in its gains article. Article 13 reads in full: “Except as provided in Article 8 (Shipping and Air Transport) of this Convention, each Contracting State may tax capital gains in accordance with the provisions of its domestic law.” India therefore taxes a US-resident landowner under section 45(5A) without treaty limit; relief is a matter for the United States.

The India-UK convention is the same in substance, but the article is numbered differently. Capital gains is Article 14, not Article 13: “Except as provided in Article 8 (Air Transport) and 9 (Shipping) of this Convention, each Contracting State may tax capital gains in accordance with the provisions of its domestic law.”

The India-UAE agreement does have an immovable property paragraph. Article 13(1): “Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in paragraph (2) of Article 6 and situated in the other Contracting State may be taxed in that other State.” Article 6(2) gives “immovable property” the meaning it has under the law of the State where the property is, and says it “shall in any case” include “rights to which the provisions of general law respecting landed property apply”. Article 13(5) makes gains from other property “taxable only in the Contracting State of which the alienator is a resident”.

What the decided cases on non-resident landowners show

In Dinesh Bhailalbhai Patel v. DCIT (International Taxation), Vadodara (ITAT Ahmedabad, ITA 3650 to 3652/Ahd/2015, 22 December 2017) three co-owners of a final plot at Anand, assessed by the International Taxation circle at Vadodara (the order does not state their residence), signed a development agreement in February 2012 for Rs 4,28,42,800 with possession, took the balance up to March 2013 and executed the sale deed in July 2013; the Bench allowed section 54EC on bonds bought within six months of the last instalment on “a liberal interpretation” in “peculiar facts” (paragraph 3), and cost on the final plot area only.

In Chennakesavan Savithri v. ITO (International Taxation) (ITAT Chennai, ITA 301/Chny/2023, 3 September 2026) a non-resident who had signed an unregistered JDA in April 2012, and returned the gain in assessment year 2018-19, was reopened for assessment year 2013-14 on the same gain; the Bench quashed the reopening because “there is no agreement in the eyes of law which can be enforced under Section 53A” (paragraph 29), leaving the merits open. In Ramesh Reddy Gongalla v. ADIT (International Taxation) (ITAT Hyderabad, ITA 113/Hyd/2024, 14 October 2024) the gain of a US resident who furnished no acquisition details was computed at a nil cost, and the Bench sent the case back because the Assessing Officer should have referred the valuation to the Valuation Officer (paragraph 7).

Proprietors and land dealers: capital asset or stock in trade

Whether land is a capital asset or stock in trade is a question of fact about the owner’s intention when he acquired it and his conduct since, and it decides everything for a business landowner: an individual who holds land as stock is outside section 45(5A), outside sections 54 and 54F, and taxed on business income in the year the stock is realised.

How character is decided

The Supreme Court, remitting the matter, restated the test in CIT v. Glowshine Builders and Developers Pvt. Ltd. (Civil Appeal 2565 of 2022, 4 May 2023), at paragraph 7: “Merely on the basis of recording of the inventory in the books of accounts, the transaction in question would not become stock in trade”, and frequency, volume and the nature of transactions over the years must be examined.

A JDA alone does not change character in either direction. The Telangana and Andhra Pradesh High Court said in Devineni Avinash v. PCIT (W.T.A. 2 of 2017 and connected appeals, 11 October 2018), rejecting in a wealth tax appeal the owners’ plea that land given for development the day after purchase was stock, that “Mere execution of a development agreement would not, by itself and without anything more, mean” the owner intended to trade. The Delhi Tribunal applied the same idea against the Revenue in Amrendra Kumar v. ITO (ITA 2937/Del/2026, 16 September 2026): the Assessing Officer, relying on the owner’s reply to the show cause notice admitting a conversion in 2016, treated an unregistered JDA of 7 April 2016 as a conversion into stock, taxed Rs 1,93,78,293 under section 45(2) and treated sale deeds of five flats to the owner’s wife, reciting Rs 4,38,68,000, as business income of Rs 2,20,98,985; following a coordinate Bench, the Tribunal held the owner “is not in the business related to real estate” and “once the issue of a stock in trade is not proved beyond doubt, the section 45 (2) cannot invoked” (paragraph 7), without dealing with the admission.

The Gujarat warning is Shri Mahendrabhai Chaturbhai Patel v. ACIT (ITAT Ahmedabad, ITA 2274/Ahd/2017, 13 September 2023). The managing director of a developer company and his brother gave their non-agricultural land to that company under a development agreement of 8 April 2013 for Rs 6,71,20,500. The Assessing Officer and the Commissioner (Appeals) taxed the managing director’s half as an adventure in the nature of trade, while the brother’s long-term gain on his half was accepted and a revision against it dropped; the Bench held the brother, “admittedly a farmer”, distinguishable and sent the matter back for fresh findings with all contentions open (paragraph 6), noting the assessee had filed no factual paper book.

The dealer who always held the land as stock

For a land dealer or developer who is itself the landowner, the JDA is a business arrangement, and the decided cases tax it when the stock is realised, not when the agreement is signed. In DCIT v. Shreyas Builders (ITAT Mumbai, ITA 2404/Mum/2023, 23 February 2024) a landowner firm that had bought land in 1982 for Rs 3,50,000 signed a registered agreement in July 2012 for 30 per cent of the constructed area, and the Assessing Officer taxed a long-term gain of Rs 30,10,94,476 under section 2(47)(v). The Bench held the land “was in the nature of inventory and not capital asset, and therefore … the provisions of Section 2(47)(v) read with Section 45 had no application” (paragraph 22), and that “the business income cannot be said to have accrued unless the consideration in form of constructed spaces is actually received” (paragraph 25). In ACIT v. Rasi Assets Corporation (ITAT Chennai, ITA 153 and 154/Chny/2017, 19 August 2022) a firm that gave stock land for 37.5 per cent of the built-up area was assessed Rs 14,27,50,637 in the JDA year; the Bench held that “‘business income’ has to be computed on mercantile basis when there is actual sale of flats by the assessee since the land could not be said to have been transferred merely by entering into JDA” (paragraph 6), and that taxing the agreement year when flat sales had been offered later “would amount to double taxation”.

For a revenue-sharing JDA the business landowner recognises its share on its own method, not the developer’s. In DCIT v. Anushka Realty Inc. and Anushka Estates (ITAT Bangalore, ITA 779 to 782 and 759 to 761/Bang/2025, 19 December 2025) the lead landowner firm, entitled to 29.55 per cent of revenue, had shown Rs 85,04,22,302 received to March 2016 as a liability; the Assessing Officer applied the developer’s percentage of completion. The Bench held that “the AO cannot compel the assessee to follow the same especially when the assessee is only a land owner” (paragraph 10.1) and that “The point of tax incidence for the assessee in our view would be the passing of risk and rewards of the ownership to the ultimate buyers upon registration of title deeds” (paragraph 10.4).

The Revenue’s answer is not weak. On the mercantile system income accrues when the right to receive becomes enforceable, and a registered agreement that fixes the owner’s area and gives possession fixes that right in the agreement year. Where the owner joins the developer in agreements to sell, the Revenue argues for percentage of completion: in the Anushka appeals the Departmental Representative said the risks and rewards of ownership had passed under the agreement (paragraph 8), and the Bench rejected that only because the owner had licensed the developer and would be paid on the sale deeds (paragraph 10.8). None of these orders discusses section 43CB or the ICDS, which the Revenue will invoke from assessment year 2017-18. No Gujarat decision on a stock landowner’s area-sharing agreement was traced.

The Expert Advisory Committee of the Institute of Chartered Accountants, in Query No. 16 finalised on 16 October 2025, advised a landowner LLP holding land as inventory under a revenue-sharing JDA, with a joint escrow and the owner conveying to purchasers only after completion and full receipt, that revenue “should be recognised by LLP only after completion of the project, receipt of entire sale proceeds in respect of the apartments and execution of a deed of conveyance” (paragraph 17), the owner’s share of performance being “primarily, the transfer of land (rather than construction services)” (paragraph 15). The Committee’s opinions are not the Council’s and do not bind the Revenue.

The Revenue now has a counter. In Sanand Properties Pvt. Ltd. v. JCIT (Supreme Court, 12 May 2026), the landowner’s right to 35 per cent of gross sale proceeds under an association agreement was a diversion at source: the share “was intercepted and diverted towards the SPPL before it could have even assumed the character of income in the hands of the AOP” (paragraph 99), and was “a business receipt arising from the surrender of development rights or a share of gross revenue” (paragraph 103), taxable in the landowner’s hands. Paragraph 99 also says the landowner “could withdraw such amount immediately”. The Revenue will use that to say a revenue-sharing landowner’s share accrues as each collection reaches the escrow, not at completion; Anushka was decided five months before Sanand and could not consider it, and no decision after Sanand on the point was traced. Part 1 decides the revenue-sharing year of charge for a capital-asset landowner; Part 5 takes Sanand for the developer.

Section 45(2): converting land into stock before the JDA

Section 45(2) treats the conversion of a capital asset into stock in trade as a transfer, fixes the fair market value on the date of conversion as its full value of consideration, and charges the resulting capital gain only “as his income of the previous year in which such stock-in-trade is sold or otherwise transferred by him”; the business profit on the later realisation is computed from that conversion value. Section 67(6) of the 2025 Act is the counterpart, charging the gain “in the tax year in which such stock-in-trade is sold or otherwise transferred”. A provision page on section 45(2) sets out the text.

The mechanics

Four consequences follow for a landowner. The capital gain is the fair market value on conversion less cost, indexed to the year of conversion where the conversion was before 23 July 2024. It is frozen at that figure; appreciation after conversion is business income. The deemed transfer is the conversion, and the rate provisions turn on when the “transfer … takes place”, so on their words a conversion in 2017 attracts 20 per cent with indexation even if the stock is sold in 2027; no decision on the point was traced. The charge waits for the sale or other transfer of the stock. And because land converted into stock is no longer “a capital asset”, the owner loses section 45(5A) on the whole of it: neither the conversion gain nor the business profit can be deferred to the certificate year under that sub-section, and sections 54 and 54F go.

Where only part of the land is given to the developer, as in an area-sharing JDA where the owner keeps an undivided share with his flats, the conversion gain is apportioned. The part attributable to the share given up is charged when that share is otherwise transferred; the part attributable to the share kept is charged when the flats, with their land share, are sold.

When is the stock “otherwise transferred” under a JDA?

The Revenue’s case is that section 45(2) does not confine “otherwise transferred” to a sale. Once the developer takes possession under a registered agreement, the land given up has been parted with in the agreement year; on Kapadia and the Karnataka line the same JDA would be a transfer of a capital asset in that year; so the conversion gain on the share given up, and the business profit on it (the value of the area receivable less its conversion value), are both chargeable then. The Ahmedabad Tribunal has used words that help it, though in a case the Revenue lost. In Swastik Engg. Mfg. Co. Pvt. Ltd., where the Revenue sought to recall a block assessment order to run section 45(2) on a conversion within the block period, the Bench dismissed the application because “the transfer of property was complete by way of the development agreement” of 1994, outside the block (MA 62/Ahd/2015, 11 April 2016, paragraph 4.1). It added that “even if it is assumed that it is in nature of stock-in-trade, there is a change of hands as the assessee had given possession of the property to the developer”.

The owner’s case is that for stock the JDA is a business arrangement and the stock is realised only when constructed area comes or the flats are sold. Section 2(47) defines transfer “in relation to a capital asset”, which land held as stock no longer is. L.K. Trust applies the deferral reading where the year was not in issue, and two decisions in which the year was contested adopt it. In L.K. Trust v. DCIT (ITAT Bangalore, ITA 1147 and 1375/Bang/2025, 9 June 2026) a private family trust had converted 1,07,511 square feet at Palace Road, Bangalore, bought in 1989 for Rs 1.5 crore, into stock on 2 April 2009 at Rs 75,25,76,000, signed a registered JDA with Prestige Estate Project Ltd (as the order names it) on 21 July 2010 for 55 per cent of the built-up area, and received 2,74,332 square feet after the April 2017 occupancy certificate. It offered both the section 45(2) gain of Rs 32,02,99,200 and business income of Rs 14,56,40,800 in assessment year 2018-19. The Assessing Officer assessed the same year, the dispute being only valuation, and the Bench, setting out the framework, said: “the gain is taxable only in the year when the stock-in-trade is actually sold or transferred. In this case, the sale took place in FY 2017-18 (AY 2018-19) when the assessee received a specified portion of the constructed commercial building from the developer” (paragraph 8.4). In Vilas Babanrao Rukari (HUF) v. ITO (ITAT Pune, ITA 1640 and 1645/PUN/2014, 25 May 2018) land converted on 19 January 2006 and given a month later under a registered revenue-sharing agreement for 18 per cent of gross sales was taxed only when the project was completed and the flats handed over to buyers, the earlier receipts being, in the Bench’s words, “an advance receipt” (paragraph 20). In DCIT v. Ramdas Haribhau Kakade (ITAT Pune, ITA 60/PUN/2015, 29 November 2017), heard without the assessee appearing, it was the Revenue that argued for the year of sale, to deny section 54B on the gain the owner had offered in the agreement year, and the Bench held that the gain arose “only when stock in trade is sold or otherwise, transferred by him”, “not in the year, in which he converted his asset into stock in trade” (paragraph 18), and the land without municipal sanction “was not even ready for development” (paragraph 17).

The Revenue’s reading is stronger where the JDA conveys the developer’s undivided share outright; the owner’s where the agreement is a licence to develop and the owner’s flats stand on land he never conveyed.

The consideration for the stock

What the owner receives for the share given up is built-up area, and its value is contested in the same way as for a capital asset (Part 2). In L.K. Trust the Assessing Officer took the developer’s construction cost of Rs 7,853 per square foot and added about Rs 167 crore. The Bench rejected it: “The builder’s cost of construction is his outlay, not the assessee’s income” (paragraph 8.8); equally the value of the land given up was not the measure: “the measure of consideration must be the value of the property (built-up space) received, not the value of the property (45% land) given up” (paragraph 8.11). It took the fair market value of the built-up space under section 50D read with section 43CA, at the Karnataka guideline rate for construction of Rs 1,208 per square foot, below the trust’s own figure of Rs 48.43 crore, which it accepted (paragraphs 8.12 to 9). It also held that section 43CA applied to the trust’s transfer of its land share, but that “no substitution under section 43CA of the Act was called for” because the declared value exceeded the stamp duty value (paragraph 8.6). That is the first decision traced applying section 43CA to a JDA at all, and it applies it on the landowner’s side. The valuation is largely revenue neutral for a stock landowner, as the Bench said (paragraphs 9.1 and 9.2): a higher value of the area received is a higher cost when it is sold.

Is the conversion genuine?

A conversion recorded months before a JDA, like Vilas Rukari’s (January 2006, agreement February 2006) or L.K. Trust’s (2009, agreement 2010), freezes the capital gain and moves later appreciation into business income. The Revenue’s best argument is that conversion is a fact proved by conduct: a book entry by an owner who carries on no business is not a “treatment by him as stock-in-trade of a business carried on by him” (Amrendra Kumar; Devineni Avinash). The owner’s answer is that the words “or its treatment by him as stock-in-trade” accept a unilateral act, and that the conversion value is the fair market value on the date of conversion: in Vilas Rukari the Commissioner (Appeals) adopted the approved valuer’s figure in place of the stamp duty value, and the Pune Tribunal upheld it (paragraphs 17 and 21). An individual who converts must also expect the Revenue, where it suits, to deny the conversion and tax the JDA as a capital asset transfer.

Worked example (h): a land trader converts his plot before the JDA

Converting before the JDA fixes the capital gain at conversion, moves later growth into business income and, on these figures, costs the trader Rs 35,80,000 more than section 45(5A) would have. The facts are illustrative. Kiran, a Bopal land trader who runs a proprietary business, has held a plot since before 1 April 2001 as an investment; its value on that date was Rs 20,00,000, which is assumed not to exceed its stamp duty value then. On 1 April 2017 he converts it into stock of his business at Rs 2,60,00,000 on a registered valuer’s report. On 15 May 2018 he signs a registered area-sharing JDA: the developer takes a 60 per cent undivided share and builds; Kiran keeps 40 per cent of the land with eight flats and receives Rs 50,00,000 by cheque on signing. The building use permission issues on 20 March 2022 and he takes the flats that month. He sells all eight on 10 January 2024 for Rs 4,80,00,000. The Cost Inflation Index values used are those notified for 2001-02 (100), 2017-18 (272) and 2021-22 (317). Business income is taken at an assumed 30 per cent and all tax is before surcharge and cess.

Table 1. The capital gain frozen at conversion on 1 April 2017

	Amount
Fair market value on conversion (deemed full value, section 45(2))	Rs 2,60,00,000
Cost: value on 1 April 2001, indexed at 272/100	Rs 54,40,000
Long-term capital gain	Rs 2,05,60,000
Part attributable to the 60 per cent share given to the developer	Rs 1,23,36,000
Part attributable to the 40 per cent share kept with the flats	Rs 82,24,000
Tax at 20 per cent (the deemed transfer is before 23 July 2024)	Rs 41,12,000

Table 2. Business income, and the year each part is charged

	Route 1: the JDA “otherwise” transfers the stock (FY 2018-19)	Route 2: transfer when the flats are received (FY 2021-22, the year assessed in L.K. Trust)	Route 3: nothing until the flats are sold (FY 2023-24, Rasi Assets)
Value of the building received for the 60 per cent share	Rs 2,00,00,000 (flats Rs 3,20,00,000 less 40 per cent of the plot’s jantri Rs 3,00,00,000)	Rs 2,56,00,000 (flats Rs 4,00,00,000 less 40 per cent of jantri Rs 3,60,00,000)	not separately valued
Section 43CA check: stamp duty value of the 60 per cent land share	Rs 1,80,00,000: consideration higher, no substitution	Rs 2,16,00,000: no substitution	not reached
Business income on the 60 per cent share (building plus Rs 50,00,000 cash, less stock cost Rs 1,56,00,000)	Rs 94,00,000 in FY 2018-19	Rs 1,50,00,000 in FY 2021-22	nil until sale
Capital gain on the 60 per cent share charged in the same year	Rs 1,23,36,000 in FY 2018-19	Rs 1,23,36,000 in FY 2021-22	nil until sale
Business income on sale of the flats (Rs 4,80,00,000 less stock cost)	Rs 1,76,00,000 in FY 2023-24	Rs 1,20,00,000 in FY 2023-24	Rs 2,70,00,000 in FY 2023-24
Capital gain charged on the sale	Rs 82,24,000 in FY 2023-24	Rs 82,24,000 in FY 2023-24	Rs 2,05,60,000 in FY 2023-24
Total business income over the project	Rs 2,70,00,000	Rs 2,70,00,000	Rs 2,70,00,000
Total tax (capital gain at 20 per cent; business income at an assumed 30 per cent)	Rs 1,22,12,000	Rs 1,22,12,000	Rs 1,22,12,000

Table 3. The same owner without the conversion: section 45(5A)

	Amount
Full value in FY 2021-22: stamp duty value of the flats on 20 March 2022 plus cash	Rs 4,50,00,000
Cost: value on 1 April 2001, indexed at 317/100	Rs 63,40,000
Long-term capital gain, taxed at 20 per cent	Rs 3,86,60,000; tax Rs 77,32,000
Sale on 10 January 2024: price less section 49(7) cost of Rs 4,50,00,000	Rs 30,00,000
Tax on the sale if short-term (held from the certificate), at an assumed 30 per cent	Rs 9,00,000
Total tax without the conversion	Rs 86,32,000
Total tax with the conversion (Table 2)	Rs 1,22,12,000

Two things the tables show. First, the route changes only the year, not the total: whichever year the 60 per cent share is treated as otherwise transferred, the business income over the project is the same Rs 2,70,00,000 (Rs 4,80,00,000 from the flats plus Rs 50,00,000 in cash, less the Rs 2,60,00,000 conversion value), and the capital gain is the same Rs 2,05,60,000. What moves is interest. Second, the conversion cost him money. Without it, section 45(5A) would have taxed him in 2021-22 at 20 per cent on the whole gain to the certificate date, and only Rs 30,00,000 of post-certificate gain at slab rates; with it, Rs 2,70,00,000 of appreciation after 1 April 2017 is business income at 30 per cent. The total is Rs 1,22,12,000 against Rs 86,32,000. (Table 3 includes the cheque in the deemed full value; for a certificate before 1 April 2024 that is arguable, as Part 1 explains.)

Firms and LLPs as landowners

A partnership firm or an LLP that owns land and signs a JDA is outside section 45(5A), because it is neither an individual nor an HUF, and an LLP is a “firm” for income tax; it is taxed in the year the land is transferred under section 2(47), on the general rules for consideration and cost, with section 54EC as its only reinvestment relief. If the firm holds the land as stock, which is the usual case where the firm is itself in real estate, the dealer rules above apply instead.

Year and value. For a firm the whole of Part 1’s analysis of section 2(47)(v) and section 53A decides the year: a registered agreement giving possession in part performance with a willing developer can be a transfer in the agreement year, years before any flat exists; a licence to enter for development is not (Seshasayee Steels; Dholu), though the Hyderabad line taxes a registered recital of possession in the agreement year. The full value is measured by the methods Part 2 compares, with section 50C as a floor where it reaches the transfer, which is disputed for development rights (Part 2).

Rate. A firm’s long-term gain is taxed under section 112(1)(d) at 20 per cent with indexation for a transfer before 23 July 2024 and 12.5 per cent without it for a transfer on or after that date; the comparison in the second proviso to section 112(1)(a) is for resident individuals and HUFs only.

Exemptions. Sections 54 and 54F are confined to an individual or an HUF. Section 54EC is open to any assessee on a long-term gain from land or building, so a firm receiving cash under a hybrid JDA can invest up to Rs 50 lakh in the specified bonds within six months.

Partners who are also on the developer’s side. In DCIT v. Mukesh Jamnadas Shah (ITAT Ahmedabad, IT(SS)A 201 to 203/Ahd/2019, 27 March 2023) three landowners who between them held 10 per cent of the developer firm, Akshar PHC Realcon, had a development agreement of 25 September 2014 over about 32,987 square metres at Gotri, Vadodara, for Rs 127 crore; the seized copy was signed only by the developer and was neither notarised nor registered. The Assessing Officer taxed Rs 42,05,18,483 in the agreement year relying on Kapadia, discussing section 45(2) along the way. The owners had offered gains year by year from 2017-18 as sale deeds were executed with them as confirming parties. The Bench upheld the Commissioner (Appeals): the registered sale deeds “undoubtedly clear that the possession of the property rest with the assessees” (paragraph 6.1). A further Revenue line, untested, is section 45(3): it reaches a transfer to a firm in which the owner is a partner “by way of capital contribution or otherwise”. The owner will answer that an exchange for constructed area is a sale, not a contribution, and that “or otherwise” takes colour from the words before it.

Distributing the flats to partners. A landowner firm that receives flats and then hands them to partners on retirement, dissolution or reconstitution meets section 9B and the substituted section 45(4) (sections 8 and 67(10) of the 2025 Act) from assessment year 2021-22: the firm is deemed to transfer the flats at fair market value, and is separately charged on what a partner takes above his capital account. The reconstitution article works through both charges and the capital account rules.

Land put into a developing firm: section 45(3)

A partner who contributes his land to a firm in which he is or becomes a partner, and the firm then develops it, is taxed under section 45(3) in the year of contribution, on the amount recorded in the firm’s books as the full value of consideration; section 45(5A) has no role because the contribution is not a specified agreement. Section 67(9) of the 2025 Act carries the rule, and the provision page on section 45(3) sets out the text.

The text. Section 45(3) charges “The profits or gains arising from the transfer of a capital asset by a person to a firm or other association of persons or body of individuals (not being a company or a co-operative society) in which he is or becomes a partner or member, by way of capital contribution or otherwise … as his income of the previous year in which such transfer takes place and, for the purposes of section 48, the amount recorded in the books of account of the firm, association or body as the value of the capital asset shall be deemed to be the full value of the consideration”.

What survives of Sunil Siddharthbhai. Before section 45(3), the Supreme Court held in Sunil Siddharthbhai v. CIT (27 September 1985, (1985) 156 ITR 509), on references from the Gujarat High Court by two partners who brought shares into their firms as capital, that a contribution is a transfer because the partner “reduces his exclusive rights in the asset to shared rights in it with the other partners of the firm”, but that no gain could be computed: “It is impossible to conceive of evaluating the consideration acquired by the partner when he brings his personal asset into the partnership firm when neither the date of dissolution or retirement can be envisaged nor can there be any ascertainment of liabilities and prior charges which may not have even arisen yet.” Section 45(3) answered that by supplying a deemed consideration, so the computation holding is spent. The Court’s warning about devices is not, and its exact words matter: “If the transfer of the personal asset by the assessee to a partnership in which he is or becomes a partner is merely a device or ruse for converting the asset into money which would substantially remain available for his benefit without liability to income tax on a capital gain, it will be open to the income tax authorities to go behind the transaction and examine whether the transaction of creating the partnership is a genuine or a sham transaction and, even where the partnership is genuine the transaction of transferring the personal asset to the partnership firm represents a real attempt to contribute to the share capital of the partnership firm for the purpose of carrying on the partnership business or is …” The second limb is the one that matters for land: even a genuine firm can be examined on whether putting the land in was a real capital contribution or a route to cash. The Allahabad High Court applied that test in Carlton Hotel (ITA 31 of 2009, 31 January 2017), where a company contributed land at book value to a firm in which it held five per cent: it answered for the Revenue its first question, whether section 50C rather than section 45(3) governed a contribution said to be a colourable device, on a prima facie view that the partnership was a sham (paragraphs 86 and 92), and refrained from answering the remaining questions, remanding them (paragraphs 91 to 93); open question 6 below takes this further.

Book value works both ways. In Sai Teja Constructions v. DCIT (ITAT Hyderabad, ITA 651/Hyd/2017 and connected appeals, 11 October 2023) a firm holding two acres at Madenaguda, bought in October 2006 for Rs 1.20 crore, revalued it to Rs 6 crore, credited Rs 4.80 crore to its own profit and loss account, and contributed it as capital to a new firm formed with five others to build a residential complex, calling the arrangement a joint development. The Bench held section 45(3) applied on the recorded value of Rs 6 crore, and, following the Special Bench in DLF Universal (as cited), that the section applies even to stock introduced into a firm (paragraphs 20 and 21). The contributing partner also could not claim the developing firm’s section 80-IB(10) deduction. Recording the land at cost minimises the gain; recording it at market value creates one.

Land for shares in the developer. Section 45(3) does not reach a contribution to “a company or a co-operative society”, so an owner who puts land into a developer company or a project SPV in exchange for its shares is outside it, and outside section 45(5A) too, because shares are not “a share, being land or building or both in such project”. The contribution is an ordinary transfer by exchange under section 2(47), taxed in the year the land is conveyed, on the value of the shares allotted, with section 50C substituting the stamp duty value of the land if that is higher. No decision on a JDA structured this way was traced.

Converting the landowner firm before or during the JDA

A landowner firm can become a company before or during a JDA without a capital gain only within section 47(xiii), and an LLP only on the conditions in the Board’s explanatory notes; the conditions run through the life of a typical project. The conversion article covers the conditions, their breach and the computation; three points are JDA-specific.

Firm to company: section 47(xiii). The transfer of a capital asset by a firm to a company on succession is exempt only if “all the assets and liabilities of the firm … relating to the business immediately before the succession become the assets and liabilities of the company”, all partners become shareholders “in the same proportion in which their capital accounts stood”, the partners receive no “consideration or benefit, directly or indirectly, in any form or manner, other than by way of allotment of shares”, and their aggregate shareholding stays at not less than fifty per cent of the voting power “for a period of five years from the date of the succession”. Section 70(1)(zd) of the 2025 Act carries the conditions. For a landowner firm three traps follow. If the JDA was signed before the conversion and was itself a transfer under section 2(47)(v), the conversion does not shelter that gain, which remains the firm’s. If partners who became shareholders take flats from the company’s share for themselves, the “consideration or benefit, directly or indirectly” condition is in issue. And the five-year voting condition runs straight through the construction period; a sale of shares to the developer to settle the project breaks it. The successor company is outside section 45(5A) as much as the firm was, so conversion never buys a deferral.

Firm to LLP. There is no exemption clause, because an LLP is a firm. The Board’s explanatory notes to the Finance (No. 2) Act, 2009 say the conversion has no tax implications if the partners’ rights and obligations stay the same and no asset is transferred after conversion, and that section 45 applies otherwise; the conversion article quotes them. For a JDA, the LLP steps into the firm’s position under the agreement without a fresh transfer if nothing else changes, but a revaluation of the land on conversion breaches the condition and creates the gain the conversion was meant to avoid. A landowner company converting into an LLP, and a proprietor whose business passes to a company, have their own exemption clauses, section 47(xiiib) and section 47(xiv), with conditions that likewise run for years after the conversion; the conversion article covers both.

Companies as landowners: year, rate, MAT and the accounts

A company that owns land and signs a JDA is outside section 45(5A) and is taxed in the year the land is transferred under section 2(47): as a capital gain if it held the land as an investment, as business income if it held it as inventory. Its minimum alternate tax runs on book profit, which follows the year its accounts recognise the disposal, and that year need not be the tax year.

Year of transfer and the decided cases on company landowners

The general timing law applies without the cushion of section 45(5A), and companies have won and lost on it. In NKA Commercial Pvt. Ltd. v. ITO (ITAT Kolkata, ITA 1106/KOL/2023, 26 December 2023) a company’s registered JDA of 30 July 2014 was held not to be a transfer: “mere execution of joint development agreement with the builder would not result in any transfer of land by the assessee” (paragraph 5), possession had not been given in part performance and nothing had been built. Against the company, Olivia Apparels Pvt. Ltd. v. DCIT (ITAT Bangalore, 14 February 2023) upheld taxing a company landowner in the year of a 2003 JDA because the developer had “absolute possession and not the permissive possession” (paragraph 37), with the flats received costing the value taxed on the land and their holding counted from the JDA.

A domestic company’s long-term gain is taxed under section 112(1)(b) at 20 per cent with indexation for a transfer before 23 July 2024 and 12.5 per cent without it on or after that date, with no comparison; sections 54 and 54F are not available, section 54EC is, and a company that has opted for section 115BAA is outside MAT by section 115JB(5A).

MAT and the accounts

Section 115JB taxes a company whose normal tax falls below 15 per cent (for an assessment year from 2020-21, under the proviso to sub-section (1)) of its book profit, computed from the statement of profit and loss. For a landowner company the question is when its accounts recognise the disposal, and the answer depends on how it holds the land.

A company under the Indian Accounting Standards that holds land as inventory recognises revenue under Ind AS 115 when control passes, and measures non-cash consideration at fair value: paragraph 66 says “an entity shall measure the non-cash consideration (or promise of non-cash consideration) at fair value”, and paragraph 67 allows measurement by reference to the stand-alone selling price of what the entity promises where fair value cannot be reasonably estimated. A company still on the earlier accounting standards follows the ICAI Guidance Note on Accounting for Real Estate Transactions (Revised 2012) for inventory, which recognises revenue on the transfer of significant risks and rewards; the Expert Advisory Committee applied that framework to a landowner in Query 16 of 2025, deferring recognition to completion, full receipt and conveyance.

The consequence is a timing mismatch. A registered JDA giving possession may be a transfer for tax in the agreement year, while the books recognise nothing until handover; or the books may recognise the disposal on signing while the company argues, for tax, that a licence to develop is no transfer. Section 115JAA credit bridges the mismatch within the 1961 Act. For a mismatch that straddles 1 April 2026, section 536(2)(l) of the 2025 Act carries MAT credit under section 115JAA into “corresponding provisions or section 206(3) or (4)” of the 2025 Act; how much can be set off then depends on those sub-sections. The rate and credit rules of section 206(1) for tax year 2026-27 are on the MAT provision page; the Department’s current text of section 206 could not be re-read for this Part, so no 2025 rate is stated here.

A JDA paired with a sale of the landowner company’s shares

In CIT v. Vijaya Productions P. Ltd. (Madras High Court, TCA 229 of 2012, 27 April 2026) a Joint Venture Agreement, Shareholders’ Agreement and power of attorney of 26 May 2006 with Prestige Estates Projects were to give it a 50 per cent stake in the landowner company for Rs 115 crore, and the Assessing Officer, relying on section 2(47)(vi) and its Explanation 2, assessed a transfer in 2006-07. The Court held that where both agreements “remained only on paper” to 31 March 2007, “the provisions of Section 45 do not come into play” (paragraph 13), and that the Revenue “ought to have waited till the Joint Venture Agreement and the Share Transfer Agreement were actually implemented” (paragraph 14). Where the shares are actually allotted or sold, that section 2(47)(vi) argument, that the share route is the real transfer of the land, is the Revenue’s best case, and section 50C cannot reach the price.

Worked example (b): the same deal, signed by a company

On the same deal a company can be taxed on the land years before the individual, is taxed again on the later rise in its flats, and can pay MAT in a year with no tax charge. An individual and a company each own land bought on 1 June 2005 for Rs 40,00,000, held as a capital asset. Each signs a registered area-sharing JDA on 15 May 2023, giving it 40 per cent of the built-up area and Rs 1,00,00,000 in cash on signing. The completion certificate issues on 20 March 2027, when the stamp duty value of the owner’s share is Rs 6,00,00,000. The flats are sold on 10 January 2028 for Rs 6,60,00,000. For the company three further figures are assumed: a valuer’s value on 15 May 2023 of the 40 per cent share to be built, Rs 4,20,00,000; the stamp duty value of the whole plot on that date, Rs 4,00,00,000; and that the registered agreement gives the developer possession with a power of attorney, which is the Revenue’s case for a transfer in 2023-24. The Cost Inflation Index values used are those notified for 2005-06 (117) and 2023-24 (348). The table uses the whole-plot exchange model, so that the company and the individual are compared on the same footing; the two-part model of K.S. Akhilesh Babu (Bangalore, 2025), in which only the share given up is transferred and the share kept retains its original cost, changes the split between the land year and the flat year.

Table 1. The year of charge and the tax on the land (before surcharge and cess)

	Company: Revenue’s view (registered JDA with possession, FY 2023-24)	Company: transfer on handover (tax year 2026-27)	Individual under section 45(5A)
Full value of consideration	Rs 5,20,00,000 (value of the 40 per cent share on 15 May 2023, Rs 4,20,00,000, plus cash)	Rs 7,00,00,000 (value of the share received, taken at its stamp duty value on 20 March 2027, plus cash; section 45(5A) itself does not apply)	Rs 7,00,00,000
Stamp duty value of the land on the transfer date (section 50C check)	Rs 4,00,00,000: below the consideration, no substitution	not reached: consideration measured by the share received	not applicable
Cost	Rs 40,00,000 indexed at 348/117 = Rs 1,18,97,436	Rs 40,00,000 (no indexation after 23 July 2024)	Rs 40,00,000
Long-term capital gain	Rs 4,01,02,564	Rs 6,60,00,000	Rs 6,60,00,000
Rate	20 per cent, section 112(1)(b)	12.5 per cent, section 197 of the 2025 Act	12.5 per cent; the section 197(3) comparison at 20 per cent with cost indexed at 384/117 gives Rs 1,13,74,359, so no relief
Tax	Rs 80,20,513	Rs 82,50,000	Rs 82,50,000

Table 2. Sale of the flats on 10 January 2028 for Rs 6,60,00,000

	Revenue’s view of the land year	Handover view	Individual (section 49(7) cost)
Cost of the flats	Rs 4,20,00,000 (value taxed as their price in FY 2023-24)	Rs 6,00,00,000 (value taxed in tax year 2026-27)	Rs 7,00,00,000 (deemed full value, cash included)
Gain or loss	Rs 2,40,00,000	Rs 60,00,000	minus Rs 40,00,000
Character	long-term if held from the JDA (15 May 2023); short-term if from handover (March 2027)	short-term (held from March 2027)	short-term if held from the certificate (Part 2)
Tax if long-term at 12.5 per cent	Rs 30,00,000	not applicable	not applicable

Table 3. Minimum alternate tax when the books and the tax year disagree (company not under section 115BAA)

Book recognition	Tax view of the land year	AY 2024-25 (FY 2023-24)	Tax year 2026-27
Disposal booked in FY 2023-24, book gain Rs 4,80,00,000	Revenue’s view (transfer FY 2023-24)	normal tax Rs 80,20,513 exceeds MAT of Rs 72,00,000: normal tax payable, no credit	nothing further on the land
Disposal booked in FY 2023-24, book gain Rs 4,80,00,000	Handover view (transfer tax year 2026-27)	no normal tax on the land; MAT Rs 72,00,000 payable and carried as credit under section 115JAA	normal tax Rs 82,50,000; the credit passes by section 536(2)(l) into section 206(3) or (4), whose set-off rules are not stated here
Disposal booked in FY 2026-27, book gain Rs 6,60,00,000	Revenue’s view (transfer FY 2023-24)	normal tax Rs 80,20,513; no book gain, so no MAT question	no normal tax on the land, but book profit includes Rs 6,60,00,000: section 206(1) applies at its current rate, with no credit for the 1961 tax

The company pays more, and earlier. On the Revenue’s view of the year, the company is taxed in 2023-24 on Rs 4,01,02,564, when it has Rs 1,00,00,000 in cash and no flat, and its flats then cost only the Rs 4,20,00,000 at which they were valued in 2023, so the rise to Rs 6,60,00,000 is taxed again when they are sold. The individual is taxed once, in the certificate year, at Rs 82,50,000; the section 197(3) comparison does not lower it here, because 20 per cent on cost indexed at 384/117 gives Rs 1,13,74,359.

If the accounts book the disposal in 2023-24 but the company maintains that no transfer took place until handover, it pays Rs 72,00,000 of MAT in assessment year 2024-25 on a gain it says is not yet taxable, and must recover it as credit against tax years under the 2025 Act. If instead the accounts wait for handover while the Revenue wins on the 2023-24 year, the company pays normal tax in 2024-25 and then finds Rs 6,60,00,000 in book profit in tax year 2026-27, on which section 206(1) applies with no credit for the 1961 tax.

Related-party JDAs and promoter-landowners

Where the landowner and the developer are the same family, a director and his company, or partners on both sides, the Revenue looks first at character (is the land really a capital asset of the promoter), then at price (is the landowner’s share set or re-set to move profit), and the decided cases show the Tribunal accepting genuine arrangements while leaving character open for proof.

Directors and their company: re-pricing the share. In Rameshlal Bullchand Ambwani v. PCIT (ITAT Ahmedabad “A” Bench, Annapurna Gupta and T.R. Senthil Kumar, ITA 196/Ahd/2022 and 234/Ahd/2023, 24 January 2024) two brothers signed a revenue-sharing JDA of 21 January 2014 with their own company, Gayatri Infrastructure Ltd, for “Maitri Shiv Greens” on their own land in Ahmedabad: 15 per cent of the consideration of each flat sold, reduced by a rectification deed of 14 October 2014 to 11 per cent, to be received as sale deeds were executed. In 2016-17 one brother received Rs 99,37,734 and claimed section 54F on a gain of Rs 78,26,866, which the Assessing Officer denied. The Principal Commissioner revised the assessment for want of enquiry into the reduction, putting the under-assessment at Rs 36,13,721. The Bench quashed the revision: “All amendments to the JDA are validly done” and “the excess consideration has been reflected in the hands of the other party to the JDA” (paragraph 7). The year-by-year receipt basis of the revenue share was accepted without argument.

Owners who are partners of the developer firm. Mukesh Jamnadas Shah (above) shows owners holding 10 per cent of the developer firm taxed deed by deed as confirming parties, the Revenue’s agreement-year theory failing on registered deeds that kept possession with the owners.

The promoter’s own land. In DCIT v. Minal Urmil Shah (ITAT Ahmedabad, ITA 1075/Ahd/2023, 2 January 2025) a partner of a developing firm, in whose name with another the land had been bought, gave development rights to the firm by a notarised banakhat; the Assessing Officer applied jantri to 20,100 square metres and taxed a short-term gain of Rs 3,16,37,500. The Bench held that she was a name-lender, the investment being the firm’s (paragraph 9), and added that “the provision of section 50C of the Act is not found applicable on the transfer of development rights” because “neither any land nor any building has been transferred” (paragraph 10). That second holding is a further reason, given after the name-lender finding had disposed of the appeal, and did not consider the Explanation to section 269UA(d)(i), but it is a reasoned Ahmedabad view.

Family conveyances of the flats. In Amrendra Kumar (Delhi, 2026, above) five of six flats received under the JDA were conveyed to the owner’s wife by sale deeds without actual payment, which the owner said was so that they could be mortgaged to a bank; the Tribunal held the transfer, made “to safeguard the interest of property”, was no sale and gave no business income (paragraph 11). The clubbing rule in section 64(1)(iv) and the relative exclusion in section 56(2)(x) were not discussed.

Gujarat: what the record shows

No decision of the Gujarat High Court or of the Ahmedabad, Surat or Rajkot Benches applies section 45(5A) to an HUF, an heir, a minor, a non-resident, a firm or a company, or decides partition, death or pooling under a JDA. The Gujarat record on these holders is of facts and character, and every Bench elsewhere is a coordinate Bench for Ahmedabad: the Ahmedabad Bench should follow a Mumbai, Bangalore, Hyderabad or Chennai order on like facts or seek a Special Bench under section 255(3) (section 364(4) of the 2025 Act), not treat it as merely persuasive.

Co-owners. The Gujarat High Court in Chhaganlal Mulji Dholu v. JCIT (Special Civil Application 3406 of 2022, 25 November 2022) quashed a reopening against a 9.58 per cent co-owner of land on Dabhoi Road, Vadodara, who had offered his gain when the sale deed was executed, holding that the development agreement was not a transfer at that stage. In Rajendra Laxmanbhai Makwana (Ahmedabad, 2022) three brothers who inherited land at Naroda were allowed the 1 April 1981 value on co-owner parity but cost only on the final plot area actually sold.

HUFs. Shri Vithalbhai Kalidas Patel HUF v. DCIT (ITAT Ahmedabad, ITA 303 and 324/Ahd/2017, 14 October 2019) allowed two HUFs, each holding half of land at Sola sold to Nirvana Procon for Rs 10,71,00,000, about Rs 2.69 crore each of non-agricultural conversion charges as cost of improvement, following the Gujarat High Court in Mathurdas Mangaldas Parekh, though under the agreement the buyer was to bear them and paid them to the Government.

Heirs. Ramilaben Ganpatbhai Patel and Arunaben Kaushikkumar Patel (Ahmedabad, 2022) taxed four heirs on a registered sale deed of July 2011 though their father had signed a banakhat in July 2000 and received his share of the price before his death in 2010.

Non-residents. Dinesh Bhailalbhai Patel (Ahmedabad, 2017), above, is the nearest Gujarat case, assessed by the International Taxation circle: section 54EC allowed on a liberal reading and cost confined to the final plot area. Its paragraph 5 says the Valuation Officer had rightly adopted the original area while dismissing the ground that sought it; only its outcome should be cited.

Open questions in Part 3, argued both ways

Six questions in this Part remain open, each set out with the argument on both sides.

1. Does a partition after a registered JDA move the section 45(5A) gain to the members? For the members: what the HUF held after signing was a right to its share in the project, distributed on partition, a transfer to which section 45 does not apply (section 47(i)), so each member’s portion is his when the certificate issues. For the Revenue: the gain arises from the HUF’s own transfer and section 45(5A) only fixes the year; section 171(1) keeps an assessed family alive until a finding is recorded, and section 171(9) ignores a partial partition and makes members liable for later periods too. No decision. The Revenue’s reading fits the words unless a total partition has been recorded; after that, section 171(4) and (5) reach only income up to the partition, and the members’ reading has the better of it.

2. Who is taxed when the owner dies between the agreement and the certificate? For the heirs: the deceased held only a right to his share, which devolved on them, and a deemed income for a year beginning after death is not “the income of the deceased”. For the Revenue: section 159(2)(b) lets the proceeding that could have been taken against the deceased be taken against his legal representative, and section 45(5A) relocates the deceased’s gain without creating a new transferor. A third route is section 168, which charges the estate’s income on an executor during administration. No decision; one return, by the legal representative or the executor, is the safe course.

3. Does a UAE resident’s development right fall in Article 13(1) or Article 13(5)? For the landowner: a right under a contract to develop, as distinct from land, is “other property” taxable only in the residence State. For the Revenue: Article 6(2) takes its meaning from Indian law, under which rights in land are immovable property, and expressly includes rights to which the general law of landed property applies. No decision; the Revenue’s argument is the stronger one for an owner who transfers land.

4. When is converted stock “otherwise transferred” under a JDA? For the owner: when constructed area is received or the flats sold (Vilas Rukari; Ramdas Kakade; L.K. Trust, where the year was not contested; Rasi Assets and Shreyas Builders for land always held as stock). For the Revenue: a registered agreement with possession parts with the land given up in the agreement year, and section 45(2)’s “otherwise transferred” is wider than a sale. The weight of decided cases favours the owner; no Gujarat or High Court ruling on the merits.

5. Does Sanand Properties fix a revenue-sharing business landowner’s accrual at each collection? For the Revenue: Sanand paragraph 99 treats the landowner’s 35 per cent as intercepted at source and withdrawable immediately. For the landowner: Sanand decided who is taxed, not when, and accepted the assessment years before it; a business landowner may follow a consistent project completion method (Anushka; EAC Query 16). No decision after Sanand.

6. Does section 50C override the book value in section 45(3)? For the partner: section 45(3) is the specific rule for contributions to a firm and fixes the consideration by its own words, as the Ahmedabad Tribunal held in Nareshbhai Ishwardas Patel (ITA 809/Ahd/2018, 23 August 2023); the Mumbai Tribunal in Amartara (29 December 2017) reached the same result for land contributed to an LLP, holding that the section 50C fiction cannot be imported into the section 45(3) fiction. For the Revenue: section 50C applies to every transfer of land or building where the consideration is below stamp duty value, and Carlton Hotel (Allahabad High Court, ITA 31 of 2009, 31 January 2017) answered for the Revenue its first question, whether section 50C rather than section 45(3) governed a contribution said to be a colourable device, on a prima facie view that the partnership was a sham (paragraphs 86 and 92); held that a contribution of land to a firm is a transfer that requires registration under section 17(1)(b) of the Registration Act (paragraph 90); and refrained from answering the remaining questions, including whether section 50C can be invoked where the contribution is unregistered, remanding them (paragraphs 91 to 93). Nareshbhai Ishwardas Patel distinguished it as a sham-partnership case (paragraph 11.3). Amartara, decided eleven months later, discussed only the Lucknow Tribunal’s order that Carlton set aside. No High Court has decided the point for a genuine contribution.

A practitioner’s checklist

Each step below states the risk it guards against.

1. Fix status and capacity in the agreement. State whether each owner signs as an individual, as karta for an HUF, as guardian or as legal representative. The risk: K.R. Lakshmi, where an HUF claim failed because the owners signed individually, and N.G. Balu Reddy, where the HUF was reassessed years later.
2. Record any partition before signing, and register it. Make it total, and if the family has been assessed, have the finding recorded under section 171. The risk: a partial partition, or a total one with no finding, leaves the gain with the HUF (section 171(1) and (9); section 315 of the 2025 Act).
3. For pooled plots, keep each owner’s land, share and money separate. One agreement is acceptable; a pooled allocation, a joint account and joint sales are not. The risk: N.P. Bagwan, an association of persons outside section 45(5A).
4. Get court permission for a minor’s land, and decide whose income it is. The risk: a voidable transfer, and exemptions claimed on the wrong person’s facts.
5. For a non-resident, apply for a certificate before the cash is paid. Compute it on the gain element and show the section 45(5A) deferral; keep deposits documented as refundable, and the acquisition papers in India (Gongalla). The risk: section 195 deduction at full rates years before the gain is chargeable, and no 23 July 2024 comparison to fall back on.
6. Decide character plot by plot before signing. Books, holding period and conduct must agree. The risk: Mahendrabhai Chaturbhai Patel, a promoter’s land treated as trading; or Amrendra Kumar’s mirror image, a conversion the Revenue built on the owner’s own loose reply to a show cause notice.
7. If converting under section 45(2), get a registered valuer’s report on the conversion date and convert only what will be sold as stock. The risk: post-conversion appreciation taxed as business income at slab or company rates, and the loss of section 45(5A) on the whole plot.
8. For a firm or company, plan the year of transfer in the drafting. Possession given only for development, with the owner remaining owner and the developer holding as the owner’s representative, was held no transfer in Nasrin Memon even with an irrevocable power of attorney, though the Hyderabad line taxes a registered recital of possession in the agreement year; possession in part performance of a contract to transfer, with the developer free to deal with the land, puts the charge in the agreement year. The risk: tax years before any flat exists.
9. For land put into a developing firm, record it at a value you are prepared to be taxed on. The risk: Sai Teja Constructions, where a revaluation to Rs 6 crore became the gain, and the Sunil Siddharthbhai device test where land goes in and cash comes out.
10. For a company, align the accounting policy with the tax position. The risk: MAT paid in one year on a gain the company says is not yet taxable, or book profit in a 2025 Act year with no credit for 1961 tax already paid.
11. In a related-party JDA, get a valuer’s report on the landowner’s share at the agreement date. The risk: a revision for the re-pricing, as attempted in Ambwani, and a character dispute on the promoter’s land.

Concordance: the Income-tax Act, 1961 and the Income-tax Act, 2025

Each 1961 provision used in this Part is paired below with its counterpart in the Income-tax Act, 2025.

Subject	Income-tax Act, 1961	Income-tax Act, 2025
Transfer, including part performance	s.2(47), (v), (vi)	s.2(109), (g), (f)
Capital asset; agricultural land	s.2(14), (iii)	s.2(22), (iii)
Short-term capital asset; previous owner’s period	s.2(42A) and Explanation 1	s.2(101)(a) to (c)
Deemed transfer on distribution to a partner	s.9B	s.8
Charge to capital gains	s.45(1)	s.67(1)
Conversion into stock in trade	s.45(2)	s.67(6)
Capital contribution to a firm, AOP or BOI	s.45(3)	s.67(9)
Receipt by a partner on reconstitution	s.45(4)	s.67(10), (11)
Specified agreement; definitions; proviso	s.45(5A)	s.67(14), (15), (16)
Distribution on partition of an HUF	s.47(i)	s.70(1)(a)
Firm, company to LLP, proprietor: succession exemptions	s.47(xiii), (xiiib), (xiv)	s.70(1)(zd), (ze), (zf)
Cost by mode of acquisition; cost of the share under a specified agreement	s.49; s.49(7)	s.73(1) Table; Sl. No. 20
Stamp duty value as full value	s.50C	s.78
Fair market value where consideration is not ascertainable	s.50D	s.80
Stock in trade: stamp duty value	s.43CA	s.53
Exemptions: house; other asset; bonds	s.54; s.54F; s.54EC	s.82; s.86; s.85
Property received for inadequate consideration	s.56(2)(x)	s.92(2)(m)
Income of spouse, minor child and property converted into HUF property, included in the individual’s	s.64(1)(iv); s.64(1A); s.64(2)	s.99(1)(a)(ii); s.99(1)(c); s.99(3)
Long-term gains rate; the 23 July 2024 comparison	s.112; second proviso to s.112(1)(a)	s.197; s.197(3)
Minimum alternate tax	s.115JB	s.206(1)
Legal representative	s.159	s.302
Executors	s.168	s.312
Representative assessee; liability	s.160; s.161(1)	s.303; s.304(1)
Beneficiaries’ shares unknown; trust business income	s.164; s.161(1A)	s.307(1); s.307(3), (4)
AOP or BOI with members’ shares unknown	s.167B	s.311
Assessment after partition of an HUF	s.171	s.315
Deduction under a specified agreement; on purchase of immovable property	s.194-IC; s.194-IA	s.393(1), Table Sl. No. 3(ii); 3(i)
Deduction from payments to non-residents	s.195	s.393(2), Table Sl. No. 17
Lower or nil deduction: payee’s certificate; payer’s application for a non-resident payee	s.197; s.195(2)	s.395(1); s.395(2)
Credit for tax deducted	s.199	s.390(5), (6)
Special Bench	s.255(3)	s.364(4)
Repeal and savings	(not applicable)	s.536

The 2025 Act references were checked against that Act’s text on the Income Tax Department’s website, each page read with its Act field showing the Income-tax Act, 2025; section 206 was read in its enacted 2025 edition only.

This note is general commentary on the law as at 24 October 2026 and is not advice on any matter. The position in a particular case depends on its own facts.