JDA TDS, searches and reassessment: section 194-IC to the 2025 Act

This is Part 6 of a six-part study of the income-tax treatment of joint development agreements. Part 1 covers whether a JDA is a transfer and in which year the landowner is taxed, including section 45(5A). Part 2 covers how much is taxed, at what cost and rate, the exemptions and the sale of the flats received. Part 3 covers HUFs, co-owners, heirs, NRIs, dealers, firms and companies as landowners. Part 4 covers trusts, societies, agricultural, leasehold and TP scheme land. Part 5 covers the developer. The redevelopment series on the same ground is at developer schemes, payments and TDS, revenue recognition, members’ transfer and cost, members’ hardship, corpus and rent, members’ exit and resale and tenants, slums, shops and NRIs.

The short answers are these. Ten per cent under section 194-IC on cash paid to a resident under a registered area-sharing agreement, with no threshold and no lower deduction certificate under the 1961 Act; one per cent under section 194-IA where the agreement falls outside that section and the threshold is crossed; section 195 for a non-resident. The credit belongs to the year the income is assessable, not the year shown in Form 26AS. Reopenings fail where the landowner can show that the year reopened was not the year of transfer, and the Gujarat High Court has quashed two notices touching development agreements since 2022, though neither was built on registration data alone. Cash in a development agreement is, on the landowner’s case, consideration for land; the Revenue taxes it as unexplained money where it is denied, so a landowner who admits it is better placed than one who denies it.

What is not settled is set out below, argued both ways: whether section 194-IC reaches a company landowner, whether the 2025 Act now allows a lower deduction certificate on JDA cash, and how section 536 treats a 1961 agreement whose certificate issues in tax year 2026-27 or later.

Key points

• Section 194-IC: ten per cent on money (not flats) paid to a resident under a registered area-sharing JDA, no threshold, earlier of credit or payment; it overrides section 194-IA. In the 2025 Act it is section 393(1), Table serial 3(ii), with Note 2 giving it priority over serial 3(i).
• Section 197(1) of the 1961 Act does not list section 194-IC or section 194-IA, so a resident landowner cannot get a lower or nil certificate; section 395(1) of the 2025 Act is wider in its words.
• Rule 37BA(3)(i) carries the credit to the year the income is assessable: under section 45(5A), the completion-certificate year. The assessment year 2026-27 return has no field for section 45(5A).
• Sugee Seven Developers (Mumbai, October 2025) rejected the argument that a perpetual leaseholder is outside the definition of specified agreement and applied section 194-IC; the developer’s escape lies in the first proviso to section 201(1).
• On-money found in a developer’s search reaches the landowner only through the regime fixed by the date of the search; section 536(2)(v) keeps pre-2026 searches on the 1961 Act.
• A 1961 JDA whose certificate issues after 1 April 2026 is charged under section 67(14) of the 2025 Act or, on the other reading, under section 536(2)(h) as substituted in 2026; the Board’s FAQs are silent.

Which withholding section applies to which JDA payment

On its words section 194-IC reaches only money, not flats, paid to a resident under a registered area-sharing JDA; the table shows where every other JDA payment falls.

Payment by the developer	Landowner	1961 Act	2025 Act (from 1 April 2026)	Status
Cash, cheque or bank transfer under a registered area-sharing JDA	Resident individual or HUF	s.194-IC, 10%, no threshold	s.393(1), Table Sl. 3(ii), 10%, threshold “Nil”	Text
Same, under a registered area-sharing JDA	Resident company, firm, LLP, trust, society	s.194-IC on the Revenue’s reading; otherwise s.194-IA	Sl. 3(ii) or Sl. 3(i)	Open; no decision traced
Flats, shops or plots (the owner’s share)	Any	None: “not being consideration in kind”	None	Text
Cash under a development agreement for money only, or a pure revenue-sharing JDA	Resident	s.194-IA, 1% of the higher of the sum and the stamp duty value, if either reaches Rs 50 lakh	Sl. 3(i), Notes 1 and 3	Text; what “such property” is for a JDA is open
Cash under an unregistered JDA	Resident	s.194-IA if it is consideration for a transfer of immovable property	Sl. 3(i)	Arguable both ways
Genuinely refundable security deposit	Resident	None on the decisions read	None	Prestige Estates (s.194-IA); Nathani Parekh test (s.194-IC)
Hardship compensation, rent for alternate accommodation	Resident	Not s.194-IC (Nathani Parekh; N Rose); not s.194-I on the Mumbai line	Not Sl. 3(ii) on the same reasoning	Mumbai Tribunal
Compensation for delay paid to the landowner	Resident	Open	Open	No decision traced
Any of the above	Non-resident	s.195 at the rates in force; s.197 and s.195(2) certificates available	s.393(2), Table Sl. 17; s.395	Text

Withholding follows the character of the payment, not the payee’s final liability: that a landowner under section 45(5A) owes nothing until the certificate year is no answer to a demand for tax not deducted at signing.

Whether monthly rent for alternate accommodation is rent within section 194-I is a separate question, answered no by the Mumbai Tribunal in a line of orders including a companion Nathani Parekh order of 21 May 2024, which the redevelopment series sets out; that order was not re-read for this series.

Revenue-sharing JDAs add a question of who pays. Where buyers pay into an escrow and the landowner’s share is released to him, the developer argues that it pays him no consideration, by analogy with Sanand Properties (Supreme Court, 12 May 2026; see Part 5), where the Court said the AOP “merely holds and disburses” the 35 per cent share of gross receipts belonging to the member that had surrendered development rights (paragraph 99); the buyers, as transferees of units whose land the landowner conveys, deduct under section 194-IA on their own payments. The Revenue’s answer is that the developer receives the price under the JDA and pays the landowner for his land, so section 194-IA (or section 194-IC, if the agreement is a specified agreement) applies to each release. Sanand concerned an AOP, not a bilateral JDA, and no decision on withholding was traced.

Section 194-IC: the text and its gateway

Section 194-IC requires “any person responsible for paying to a resident any sum by way of consideration, not being consideration in kind, under the agreement referred to in sub-section (5A) of section 45” to deduct “an amount equal to ten per cent of such sum as income-tax thereon”, “at the time of credit of such sum to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier”. It opens “Notwithstanding anything contained in section 194-IA”. The Department’s footnote records its insertion by “Act No. 7 of 2017 (w.e.f. 1-4-2017)”, that is the Finance Act, 2017, and the text has not changed since.

Three things follow from the words. The trigger is the earlier of credit and payment, so a developer that credits the landowner’s account in its books on registration and pays later must deduct at the credit. The override runs only against section 194-IA, not against section 194-I or section 195. And the whole gateway is the phrase “the agreement referred to in sub-section (5A) of section 45”, which imports the definition in Explanation (ii) to section 45(5A): “a registered agreement in which a person owning land or building or both, agrees to allow another person to develop a real estate project on such land or building or both, in consideration of a share, being land or building or both in such project, whether with or without payment of part of the consideration in cash”.

The Memorandum explaining the Finance Bill, 2017, as the Mumbai Tribunal reproduced it in Sugee Seven Developers (paragraph 7; the Memorandum’s words, not the Bench’s), said: “It is also proposed to insert a new section 194-IC in the Act so as to provide that in case any monetary consideration is payable under the specified agreement, tax at the rate of ten per cent shall be deductible from such payment. This amendment will take effect from 1st April,2017.” Section 45(5A) applies from assessment year 2018-19, so both start dates fall in financial year 2017-18; Part 1 deals with agreements signed earlier.

Who is “a person owning land”: Sugee Seven Developers

Sugee Seven Developers LLP v. ITO (TDS), ITAT Mumbai “G” Bench, Justice (Retd.) C.V. Bhadang (President) and Padmavathy S (Accountant Member), pronounced 10 October 2025, is the leading order on the section. A survey under section 133A(2A) on 12 March 2024 covered 27 entities of the Sugee group to test section 194-IC compliance. The developer had agreed with Shri Premal Dayalal Doshi to develop the land on which the building “Zaver Vihar” stood, giving him constructed area and cash, and had paid Rs 3,10,00,000, Rs 55,00,000, Rs 2,90,00,000 and Rs 3,96,00,000 in the four years (Rs 10.51 crore in all), deducting one per cent under section 194-IA. The Assessing Officer applied ten per cent and raised the differential nine per cent under section 201(1) with interest under section 201(1A).

The developer’s argument was that Doshi held only a leasehold, so he was not “a person owning land” and the agreement was not a specified agreement. The Tribunal disagreed. In its own words at paragraph 8: “If the narrower interpretation as contented by the assessee is to be accepted then it would lead to anomaly that transfer by the lease hold right owner under JDA would go out of the tax net as the transferor is not the owner as mentioned in the definition of specified agreement.” The land had been given on perpetual lease in 1938, and Doshi “is holding the right to give the land for development and is entitled to receive consideration in monetary as well non-monetary form”. Section 194-IC applied.

On Sugee Seven a perpetual leaseholder who holds the right to give the land for development makes a specified agreement: the developer deducts ten per cent, and an individual leaseholder gets the deferral under section 45(5A). Whether the same follows for a term lease from GIDC or AUDA, or land on restricted tenure, depends on whether the lease lets the holder give the land for development; a lease whose transfer needs the authority’s consent can be distinguished, and the order does not decide it. Part 4 deals with leasehold land as such.

Company, firm and society landowners

Whether section 194-IC reaches cash paid to a landowner who is not an individual or HUF is the most practical open question on the section, because Ahmedabad land is often held in companies and partnership firms.

The Revenue’s argument is strong on the words. Section 194-IC reaches consideration paid “to a resident”, not “to an individual or a Hindu undivided family”, which shows that Parliament chose not to limit the payee class. The agreement it catches is “the agreement referred to in sub-section (5A)”, and that sub-section refers to a “specified agreement”, defined by reference to “a person owning land or building or both”. The restriction to individuals and HUFs sits in the charging words of section 45(5A), not in the definition. So a registered area-sharing agreement with a company is a specified agreement, and ten per cent applies with no threshold.

The developer’s argument is about structure. Section 194-IC was enacted alongside section 45(5A) as its collection machinery, and “the agreement referred to in sub-section (5A)” naturally means the agreement under which that sub-section operates, which is one with an individual or HUF. A company’s gain is taxed in the year of transfer under section 45(1) (or as business income), not deferred, so a ten per cent withholding with no threshold has no fit with its tax. And a withholding provision that displaces section 194-IA should be read strictly. No decision was traced either way. A developer that deducts one per cent under section 194-IA on cash to a company landowner carries the section 201 risk on the Revenue’s reading; ten per cent under section 194-IC, with the landowner claiming the credit, is the cautious course. The 2025 Act has the same structure: Table serial 3(ii) speaks of “the agreement referred to in section 67(14)”, and section 67(14) applies only to individuals and HUFs.

The same reading decides mixed ownership. Where a plot is co-owned by an individual and a company, the definition is satisfied by the agreement as a whole, the individual’s gain is deferred under section 45(5A) and the company’s is not. On the Revenue’s reading the developer deducts ten per cent on both co-owners’ cash; on the developer’s reading, ten per cent on the individual’s and section 194-IA on the company’s, with the Rs 50 lakh threshold tested on the aggregate for all transferors since 1 October 2024.

Payments after 1 April 2017 under older agreements

A payment made on or after 1 April 2017 under a registered area-sharing agreement signed earlier raises a separate question. The Revenue says the section bites on the payment (“at the time of credit … or payment”) and the agreement need only answer the definition; in Nathani Parekh Constructions the lower authorities applied section 194-IC under a redevelopment agreement that the order dates variously to 2007, 2010 and, once, 30 April 2017, and the Tribunal decided on another ground. The developer says an agreement “referred to” in section 45(5A) must be one to which that sub-section can apply, and on Pankaj Kumar (Patna High Court, 12 May 2023) and the Bangalore orders discussed in Part 1, it does not apply where the transfer was completed before it came into force. No decision was traced. The words favour the Revenue where the landowner’s transfer itself falls after 1 April 2017; where possession passed years earlier, the developer’s argument has real force.

What counts as “consideration”: deposits, hardship money and delay compensation

Only money paid as the price of the landowner’s share is consideration for section 194-IC; money paid for something else is not, on the two Mumbai orders that have decided the point. The test comes from Nathani Parekh Constructions Pvt. Ltd. v. ITO (TDS) (ITAT Mumbai “B” Bench, ITA 4174 and 4171/Mum/2023, assessment years 2018-19 and 2019-20, pronounced 11 July 2024). A TDS survey had found “Alternate Accommodation/ rent” debits of Rs 2,33,48,923 and Rs 58,76,133 paid to more than 300 tenants under a redevelopment agreement with Dalal Estate Co-operative Housing Society, and the Assessing Officer applied section 194-IC. The Tribunal held, in its own words at paragraph 10, that “any sum paid under the specified agreement, to be treated as a “consideration” should have been paid as part of a share in the land or building or both including cash payments”, and that hardship and alternate accommodation charges are “in the nature of a compensation paid by the developer towards hardship suffered by the owner/ tenant due to dispossession and is not paid as part of a share in the land or building or both”. The developer was not in default. The Tribunal did not decide whether a society’s agreement can be a specified agreement.

ITO (TDS) v. N Rose Developers Pvt. Ltd. (ITAT Mumbai, ITA 6334 and 6328/Mum/2024, assessment years 2018-19 and 2019-20, pronounced 30 January 2025) followed it. A survey had found Rs 2,28,88,500 booked as “Rent to Tenant SRA” without deduction; the payments were monthly compensation to “tenants/occupants/owners/members” of a housing sanstha in lieu of temporary accommodation. The Tribunal found the payment “was paid for the alternative accommodation due to the disposition [sic] of the occupants” (paragraph 9) and, reproducing Nathani Parekh, dismissed the Revenue’s appeals. For a JDA, a landowner who vacates his house for the developer and receives monthly rent can rely on these orders to say he receives compensation, not consideration; the Revenue will say that, paid to the owner himself under the specified agreement, it is part of the price.

Refundable deposits. An interest-free deposit that the landowner must return when the project is complete is not consideration on the decisions read. In Prestige Estates Projects Ltd. v. ACIT (ITAT Bangalore, ITA 813/Bang/2019, assessment year 2014-15, pronounced 2 March 2021), the developer had paid Rs 21.85 crore as an interest-free refundable security deposit to 54 landowners under a JDA cum GPA of 3 June 2013 (Rs 1 crore an acre, recoverable from the sale of the owners’ constructed area), and the Revenue treated it as advance consideration under section 194-IA. The Tribunal recorded that entry was “by way of license” and that the agreement disclaimed delivery of possession under section 53A (paragraph 5.3), that nothing showed sanction or start of construction in the year, and held at paragraph 5.8 that “even if it is advance payment, it is not linked to the transfer of immovable property as enumerated in Section 194-IA of the Act”, so the developer was not in default under section 201(1) and (1A).

The Revenue’s best answer is the deposit that is not really refundable. In Prestige the Departmental Representative argued that the deposit was “actually not refundable” because it was recovered from the sale of the owners’ own flats; a deposit adjusted against the owner’s share, or forfeited on default, looks like consideration from the start, and the “credit” limb of section 194-IC catches it when credited. The safest drafting keeps a deposit refundable in money, secured, and separate from the share. In Rakesh Motilal Sharma (ITAT Pune, 18 June 2026) the Tribunal asked the Commissioner (Appeals) to examine the taxability of a Rs 10 crore deposit the landowner had held for seven or eight years and declared forfeited (paragraph 11).

Delay compensation. A sum the developer pays the landowner for each month of delay in handing over his flats is, on Nathani Parekh’s reasoning, compensation and not part of the price of his share. The Revenue will say it is paid “under the agreement” and swells the cash consideration. Compensation the developer pays a landowner on cancelling the JDA raises the same question in sharper form: once the agreement is cancelled it is hard to call the payment consideration under a specified agreement, and whether section 194-IA reaches it depends on whether anything is transferred. No decision was traced on either point.

Section 194-IA where section 194-IC does not reach

Section 194-IA is the default for consideration paid to a resident for the transfer of immovable property other than agricultural land. Sub-section (1) requires the transferee to deduct “one per cent of such sum or the stamp duty value of such property, whichever is higher”; sub-section (2) exempts the payment only where “the consideration for the transfer of an immovable property and the stamp duty value of such property, are both, less than fifty lakh rupees”; and the proviso aggregates “the amounts paid or payable by all the transferees to the transferor or all the transferors”. The Department’s footnotes date the higher-of rule and the “both less than” test to the Finance Act, 2022 with effect from 1 April 2022, and the aggregation proviso to Act No. 15 of 2024 with effect from 1 October 2024.

There is no JDA exclusion in section 194-IA. The only carve-out is the reverse override in section 194-IC, so where cash under a development agreement is outside section 194-IC (an unregistered agreement, an agreement for money only, a pure revenue-sharing agreement, or, on the developer’s reading, a company landowner), section 194-IA is in play if the cash is “consideration for transfer of any immovable property” and the threshold is crossed. Two problems follow.

The first is the measure. One per cent is applied to the higher of the sum and “the stamp duty value of such property”, and in a JDA the property the landowner transfers is development rights or an undivided share, not a finished unit. The Revenue’s argument is that a registered JDA with possession transfers an interest in the land itself, that “land” in general law includes the benefits arising out of it, and that the stamp value assessed on the JDA is the stamp duty value of “such property”. The developer’s argument starts from the section’s own definition: Explanation (b) to section 194-IA defines “immovable property” as “any land (other than agricultural land) or any building or part of a building”, without the “rights therein” that the Explanation to section 269UA(d)(i) adds for section 2(47)(v) and (vi) only; development rights are not land or a building, and a refundable deposit or a deferred price is not consideration for a transfer at all. No decision was traced. The cautious developer deducts one per cent on the larger figure and keeps the landowner informed, since the credit will be his.

The second is the wrong section. Hiteshkumar Mohanlal Desai v. Assessment Unit, ITO, Daman Ward (ITAT Surat, B.M. Biyani (Accountant Member) and Paresh M. Joshi (Judicial Member), ITA 962/SRT/2025, assessment year 2018-19, heard 22 July 2026 and pronounced 29 September 2026) shows what happens on the landowner’s side. Four brothers owned about 12,363 square metres of non-agricultural land at Survey No. 357/2, Village Kachigam, Nani Daman. All of them signed a registered development agreement with M/s Param Corporation “for a consideration of Rs. 24 crores”; the order describes only money consideration, and no share of constructed area is recorded. The assessee filed no return; after the section 148A procedure a notice under section 148 issued on 22 March 2022, and he returned long-term capital gain of Rs 23,47,626 on the Rs 25,00,000 he had received in the year. The developer had deducted Rs 2,86,250 “with reference to an amount of Rs. 2,86,25,000”, reported in Form 26AS; the assessee claimed Rs 25,000 and carried the rest forward. The developer’s deduction of Rs 2,86,250 on Rs 2,86,25,000 is exactly one per cent, the section 194-IA rate, not ten per cent, and the credits the assessee claimed in later years in the order’s table run at about one per cent of each year’s receipts. The Assessing Officer took Rs 2,86,25,000 as the year’s consideration and added Rs 2,45,32,692.

The Tribunal deleted the addition. It held that the assessee “actually received a sum of Rs. 25,00,000/-” while the developer “reflected a substantially higher amount” (paragraph 8); that later receipts had been offered in assessment years 2019-20 to 2022-23 and “the same has not been shown to have been disturbed by the Department” (paragraph 9); and that the co-owners’ reassessments for the same year had accepted the same method, so “the assessee’s case is at parity with the cases of other co-owners” (paragraph 10). The ground that section 45(5A) applied was raised and not decided, and although ground 5 invoked section 199 and rule 37BA, the Tribunal’s reasoning does not refer to either.

So Hiteshkumar is authority for three narrow propositions: the figure on which a developer deducts and which Form 26AS shows does not by itself fix the consideration of the year; carrying unclaimed tax forward to the years of receipt was accepted on the record; and consistent treatment of co-owners weighs. It is not authority that a cash JDA is taxed as received; on the general law the whole gain arises in the year of transfer, and the Revenue there asked only for the Form 26AS figure, not for the brothers’ share of Rs 24 crore. It is not a section 45(5A) case, because an agreement for money only is not a specified agreement, and it is not a section 194-IC case.

No lower deduction certificate for a resident landowner, and what the 2025 Act changes

A resident landowner cannot obtain a lower or nil deduction certificate against section 194-IC or section 194-IA under the 1961 Act. Section 197(1) gives the Assessing Officer power to issue a certificate where tax is to be deducted “at the rates in force under the provisions of sections 192, 193, 194, 194A, 194C, 194D, 194G, 194H, 194-I, 194J, 194K, 194LA, 194LBA, 194LBB, 194LBC, 194M, 194-O, 194Q and 195”. Neither section 194-IA nor section 194-IC is there.

An owner whose land has a high cost of acquisition, or who will reinvest in a new house and claim section 54F, or whose gain under section 45(5A) will fall years later, still suffers ten per cent of every rupee of cash from the agreement year onward. He gets it back, if at all, by credit against the tax of the year in which the income is assessable and by refund after that year’s return is processed. In the worked example below, Rs 12,00,000 is deducted between August 2022 and January 2025 and locked until the return for assessment year 2026-27 is filed.

Section 395(1) of the Income-tax Act, 2025, headed “Certificates.”, is worded differently: “Where tax is required to be deducted on any income or sum under this Chapter, then subject to the rules made under this Act”, clause (a) provides that “the payee may make an application before the Assessing Officer for deduction of income-tax at a lower rate or no deduction of income-tax”, and the Assessing Officer, “on being satisfied that the total income of the payee justifies” it, “shall issue to him a certificate as appropriate”. Since 1 April 2026 sub-section (6) also lets the application be filed before a prescribed authority that decides it on electronic verification, subject to prescribed conditions. There is no list of sections. The landowner’s argument is that the plain words now reach serial 3(ii) of the Table to section 393(1), so a resident landowner receiving JDA cash on or after 1 April 2026 can apply. The Revenue’s answer is the phrase “subject to the rules made under this Act”: if the rules confine applications to the categories the 1961 Act allowed, the change is one of drafting only. The rules under section 395 were not verified for this series, and the answer depends on them.

Non-resident landowners: section 195, certificates and treaties

Cash paid to a non-resident landowner under a JDA is outside section 194-IC, which reaches only payments “to a resident”, and falls under section 195. Section 195(1) requires a person paying a non-resident “any other sum chargeable under the provisions of this Act (not being income chargeable under the head “Salaries”)” to deduct “at the rates in force”, at the earlier of credit or payment. There is no threshold. Under the 2025 Act the counterpart is section 393(2), Table serial 17, at “Rates in force”.

Unlike a resident, a non-resident can get a certificate. Section 197(1) lists section 195, and section 195(2) lets a payer who “considers that the whole of such sum would not be income chargeable in the case of the recipient” apply to the Assessing Officer to determine “the appropriate proportion of such sum so chargeable”.

The open question is quantum where section 45(5A) defers the gain. A non-resident individual is within section 45(5A), since residence is not one of its conditions, so nothing is chargeable until the certificate year. The Revenue’s argument is that section 195 asks whether the sum is “chargeable”, not when; cash paid for the transfer of Indian land is chargeable, and tax is deducted at the full rate on the whole. The payer’s argument is that the deduction is on the income comprised in the sum, which a section 195(2) or section 197 application can fix at the gain element. No JDA decision on section 195 withholding or a lower deduction certificate was traced. The practical course is the certificate, applied for before the first instalment.

The treaties rarely change the answer: India taxes a US or UK resident’s JDA gain under domestic law, and a UAE resident’s under Article 13(1) of that agreement; Part 3 sets out the treaty texts and the one open argument on Article 13(5).

The landowner’s credit: section 199, rule 37BA and the completion-certificate year

The credit for tax deducted on JDA cash belongs to the year in which the landowner’s income from the agreement is assessable, which under section 45(5A) is the completion-certificate year, not the year shown in Form 26AS. Section 199(1) treats tax deducted and paid “as a payment of tax on behalf of the person from whose income the deduction was made”, and section 199(3) leaves the year to the Board’s rules, “including … the assessment year for which such credit may be given”.

Rule 37BA of the Income-tax Rules, 1962 does the work in three places. Sub-rule (3)(i): “Credit for tax deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable.” Sub-rule (3)(ii): where “the income is assessable over a number of years, credit for tax deducted at source shall be allowed across those years in the same proportion in which the income is assessable to tax.” Sub-rule (4): credit is granted on the deductor’s information and “the information in the return of income in respect of the claim for the credit, subject to verification in accordance with the risk management strategy formulated by the Board”.

Read together, these produce the JDA rule. Ten per cent deducted on cash at registration, plinth and slab sits in Form 26AS and the AIS for the years of payment. Under section 45(5A) the whole of that cash is part of the full value of consideration of one later year: “the stamp duty value, on the date of issue of the said certificate, of his share … as increased by” the cash (from assessment year 2024-25, “any consideration received in cash or by a cheque or draft or by any other mode”). So the income to which the deduction relates is assessable in the certificate year, and rule 37BA(3)(i) carries the credit there. The landowner should not claim it in the deduction years, should carry it forward in the TDS schedule, and should claim it in the certificate year.

The risk is administrative. The processing centre matches credit to the year in Form 26AS, and a claim in a later year for tax deducted earlier is the kind of mismatch that sub-rule (4)’s “risk management strategy” catches. The answer is the text of sub-rule (3)(i), a note in the return identifying the agreement, the certificate and each year’s deduction, and, if credit is still refused, rectification under section 154 or appeal. Sugee Seven Developers is the only order traced that records the pattern from the landowner’s side: Doshi had “declared the receipts as income based on the Completion Certificate in AY 2024-25” (the assessee’s case at paragraph 4), and the Tribunal remitted the developer’s case so the Assessing Officer could “verify the claim of the assessee that Shri Premal Dayalal Doshi has offered the impugned payments to tax in AY 2024-25” (paragraph 9). No landowner-side decision on credit carried forward to a section 45(5A) year was traced. A different risk arises where the developer deducts and does not pay the tax over, so that no credit appears at all. The Bombay High Court (B.P. Colabawalla and Firdosh P. Pooniwalla JJ.) held in Manohar Ramabtar Jhunjhunwala v. PCIT (Writ Petition 2063 of 2025 and connected petitions, 5 August 2026, paragraph 78) that where tax has in fact been deducted the Department “cannot deny the deductee the credit thereof merely because the deductor failed to deposit the amount”. The batch was not a JDA case, and the Revenue will confine it to deduction that is proved.

Two variants change the analysis. Where section 45(5A) does not apply (a company landowner, an unregistered agreement, or a share sold before the certificate under the proviso), the gain is income of the year of transfer, and tax deducted on later instalments relates to income already assessable in that earlier year. Rule 37BA(3)(i) then points back to a year whose return has been filed and may have been processed. The remedies are rectification once the deduction appears, or a claim in the later year with an explanation; neither is comfortable, and the landowner outside section 45(5A) should press the developer to deduct, if at all, in the transfer year.

The second variant is a deduction in the wrong name. Rule 37BA(2)(i) gives credit to “the other person and not to the deductee” where income on which tax was deducted “is assessable in the hands of a person other than the deductee”, but only if “the deductee files a declaration with the deductor and the deductor reports the tax deduction in the name of the other person”. JDA cash is often paid to the first-named co-owner, to the karta, to a power of attorney holder or to the heirs of an owner who has died. If the developer deducts in one name and the income is assessable in several, the declaration and the deductor’s reporting must be in place, or the credit stays with the named deductee.

The return. The e-filing schemas for ITR-2 and ITR-3 for assessment year 2026-27, read for this series, contain no field, label or code for section 45(5A); the strings “45(5A)” and “JointDev” do not occur. A section 45(5A) gain goes into the ordinary land-or-building block, with the stamp duty value of the share plus the money as the full value, and the transferee details (for a JDA, the developer) in the block that asks for the buyer’s name, PAN, share and amount. The TDS schedule’s section codes include “4IC:194IC- Payment under specified agreement”, so the credit is claimed under that code. The form gives no place to say that the year is the certificate year or to reconcile earlier deductions, which is why a computation note with the return matters.

Worked example: section 194-IC and the landowner’s credit timing

Tax deducted on JDA cash in the agreement and construction years is credited in the certificate year, when the section 45(5A) gain is assessed, not in the years Form 26AS shows it.

Illustrative facts. A resident individual bought a plot in Ahmedabad in 2006-07 for Rs 45,00,000. On 12 August 2022 she registers an area-sharing JDA (a specified agreement) under which she is to receive six flats and Rs 1,20,00,000 by bank transfer in three instalments: Rs 50,00,000 on registration, Rs 40,00,000 at plinth (20 November 2023) and Rs 30,00,000 at slab (15 January 2025). The developer deducts ten per cent under section 194-IC on each. The Ahmedabad Municipal Corporation issues building use permission for the whole project on 18 February 2026; the example assumes it is the “certificate of completion”, a point Part 1 treats as undecided. The stamp duty value of her six flats on that date is assumed at Rs 4,80,00,000. Tax is at 12.5 per cent without indexation, before surcharge and cess, which assumes the certificate date governs the 23 July 2024 rules; on the reading that the 2022 agreement is the date of transfer, the rate is twenty per cent with indexation, a question Part 2 argues both ways. The comparison for land acquired before 23 July 2024 and any section 54F claim are ignored here and worked in Part 2.

Table 1: what is deducted, where it shows, and where the credit belongs

Date of payment	Financial year	Cash paid	Tax deducted under section 194-IC (10 per cent)	Form 26AS and AIS show it for	Income from the JDA assessable that year	Credit to claim that year	Credit carried forward
12 August 2022	2022-23	Rs 50,00,000	Rs 5,00,000	AY 2023-24	Nil	Nil	Rs 5,00,000
20 November 2023	2023-24	Rs 40,00,000	Rs 4,00,000	AY 2024-25	Nil	Nil	Rs 9,00,000
15 January 2025	2024-25	Rs 30,00,000	Rs 3,00,000	AY 2025-26	Nil	Nil	Rs 12,00,000
18 February 2026 (certificate)	2025-26	Nil	Nil	AY 2026-27	Whole gain	Rs 12,00,000	Rs 0

Table 2: the AY 2026-27 computation and the credit

Item	Amount
Stamp duty value of her six flats on 18 February 2026	Rs 4,80,00,000
Add: consideration received by bank transfer, AYs 2023-24 to 2025-26	Rs 1,20,00,000
Full value of consideration under section 45(5A)	Rs 6,00,00,000
Less: cost of the plot (no indexation in this illustration)	Rs 45,00,000
Long-term capital gain	Rs 5,55,00,000
Tax at 12.5 per cent, before surcharge and cess	Rs 69,37,500
Less: credit for tax deducted in FYs 2022-23 to 2024-25 (rule 37BA(3)(i))	Rs 12,00,000
Balance payable, before surcharge, cess and interest	Rs 57,37,500
Cost of the six flats for a later sale (section 49(7): stamp duty value plus cash)	Rs 6,00,00,000

Table 3: the developer deducted 1 per cent under section 194-IA instead

Financial year of payment	Cash paid	Deducted at 1 per cent	Due at 10 per cent	Shortfall	Last date for an order under section 201(1) on the text from 1 April 2025
2022-23	Rs 50,00,000	Rs 50,000	Rs 5,00,000	Rs 4,50,000	31 March 2029
2023-24	Rs 40,00,000	Rs 40,000	Rs 4,00,000	Rs 3,60,000	31 March 2030
2024-25	Rs 30,00,000	Rs 30,000	Rs 3,00,000	Rs 2,70,000	31 March 2031
Total	Rs 1,20,00,000	Rs 1,20,000	Rs 12,00,000	Rs 10,80,000

Table 4: variant, the certificate slips to tax year 2026-27 and the agreement provides a fourth instalment of Rs 20,00,000, paid on 10 June 2026

Payment	Act and provision for deduction	Tax deducted	Year of the landowner’s charge	Credit rule
12 August 2022, Rs 50,00,000	1961 Act, section 194-IC	Rs 5,00,000	Tax year 2026-27	Rule 37BA(3)(i) of the 1962 Rules
20 November 2023, Rs 40,00,000	1961 Act, section 194-IC	Rs 4,00,000	Tax year 2026-27	Rule 37BA(3)(i) of the 1962 Rules
15 January 2025, Rs 30,00,000	1961 Act, section 194-IC	Rs 3,00,000	Tax year 2026-27	Rule 37BA(3)(i) of the 1962 Rules
10 June 2026, Rs 20,00,000	2025 Act, section 393(1), Table serial 3(ii)	Rs 2,00,000	Tax year 2026-27	Rules under section 390(6), not verified
Total deducted		Rs 14,00,000

Table 5: full value if the certificate issues on 25 May 2026, before the fourth instalment (stamp duty value assumed unchanged at Rs 4,80,00,000)

Reading of “any consideration received”	Stamp duty value of the share	Money added	Full value of consideration
Only money received by the certificate date	Rs 4,80,00,000	Rs 1,20,00,000	Rs 6,00,00,000
All money payable under the agreement	Rs 4,80,00,000	Rs 1,40,00,000	Rs 6,20,00,000

Reading the tables. The landowner pays Rs 12,00,000 of tax in the three years before any income from the agreement is assessable, and under the 1961 Act no certificate can reduce it. Credit claimed in the deduction years belongs to the certificate year, and if it is withdrawn the certificate year carries the whole Rs 69,37,500. Table 3 is the developer’s exposure where it deducted one per cent: Rs 10,80,000, recoverable under section 201(1) until the dates shown unless the first proviso protects it once the landowner’s return for assessment year 2026-27 is filed. The dates apply the six-year limit in section 201(3) as substituted from 1 April 2025; whether that or the earlier seven-year text governs earlier payments is not addressed in the material read. The Rs 20,00,000 difference in the base between the two readings in Table 5 is Rs 2,50,000 of tax at 12.5 per cent.

When the developer did not deduct, or deducted under the wrong section

A developer that fails to deduct, or deducts one per cent where ten was due, is an assessee in default under section 201(1) for the shortfall, owes interest under section 201(1A), and loses thirty per cent of the deduction under section 40(a)(ia); its way out is the first proviso to section 201(1), which in a JDA works only once the landowner has returned the income, usually in the certificate year.

The first proviso. A person who fails to deduct “shall not be deemed to be an assessee in default in respect of such tax if such payee” (i) “has furnished his return of income under section 139”, (ii) “has taken into account such sum for computing income in such return of income”, and (iii) “has paid the tax due on the income declared by him in such return of income”, and the payer furnishes “a certificate to this effect from an accountant in such form as may be prescribed”. The proviso to section 201(1A) then confines interest to the period “from the date on which such tax was deductible to the date of furnishing of return of income by such payee”.

In a section 45(5A) case condition (ii) cannot be satisfied in the year of payment, because the landowner does not take the cash into account until the certificate year, when it is added to the stamp duty value of his share. The developer must wait for that return. The Revenue may argue that the proviso requires the sum to be taken into account in the return for the year of payment; the words do not say so (“his return of income under section 139” is not tied to a year), and Sugee Seven’s remand to verify the landowner’s assessment year 2024-25 return, with interest recomputed “as per the proviso to the said sub section”, proceeds on that reading, though the point was not argued there. The Tribunal also told the Assessing Officer “not to deny the claim on the ground that Form 26A has not been filed for the years under consideration taking into account the facts peculiar to the present appeals” (paragraph 9). That is a direction on the facts, not a ruling that the accountant’s certificate is optional; the Revenue will continue to say Form 26A is a condition, and the developer should obtain it.

Limitation. Section 201(3) bars an order for failure to deduct “at any time after the expiry of six years from the end of the financial year in which payment is made or credit is given or two years from the end of the financial year in which the correction statement is delivered under the first proviso to sub-section (3) of section 200, whichever is later”. The Department’s footnote records that this text replaced the earlier seven-year limit for payments to residents by Act No. 15 of 2024 with effect from 1 April 2025. In a JDA the limit can run out before the certificate issues: a developer that underdeducted in financial year 2022-23 is exposed to an order until 31 March 2029 on this text, and if the certificate (and so the landowner’s return) comes later, the proviso cannot help but limitation may.

Section 40(a)(ia). Section 40(a)(ia) disallows “thirty per cent of any sum payable to a resident” on which tax was not deducted or not paid by the return due date, allows it in the year the tax is paid, and by the second proviso deems tax deducted and paid “on the date of furnishing of return of income by the payee” where the first proviso to section 201(1) protects the payer. The JDA difficulty is timing: cash paid to a landowner is usually part of the cost of development rights carried in work in progress, not a deduction of the year. The developer says there is nothing to disallow until the cost is released to profit; the Revenue’s practice is to reduce the work in progress in the year of payment. No JDA-specific decision on the point was traced; the cost of land is decided in Part 5, and the disallowance is on the new provision page.

The 2025 Act. The first proviso to section 201(1) is section 398(2), and section 40(a)(ia) is section 35(b)(i), whose sub-clause (B) deems deduction and payment on the date the payee furnishes the return where the payer is not in default under section 398(2). A default on a payment made before 1 April 2026 is a proceeding for a tax year beginning before that date, which section 536(2)(c) keeps on the 1961 Act and its procedure.

AIS, SFT and the registration value

A registered JDA reaches the Department as a reported transaction, and what is reported is usually the registration value, not the consideration and not the year of charge. Rule 114E of the Income-tax Rules, 1962, Table, serial 10, requires the “Inspector-General appointed under section 3 of the Registration Act, 1908 or Registrar or Sub-Registrar appointed under section 6 of that Act” to report any “Purchase or sale by any person of immovable property for an amount of thirty lakh rupees or more or valued by the stamp valuation authority referred to in section 50C of the Act at thirty lakh rupees or more”, for transactions registered on or after 1 April 2016, in Form No. 61A by 31 May after the financial year. Section 285BA, under which the rule is made, is wider: the Department’s position in the one Gujarat order on the point was that a JDA is a “transfer of right or interest in a property”.

That order is Sub-Registrar, Bavla v. DIT (I&CI), Ahmedabad (ITAT Ahmedabad, ITA 3323/Ahd/2016, pronounced 28 September 2018). Two registered development agreements in Bavla in favour of Pacifica Developers, under which the landowners had received Rs 7,20,28,000 and Rs 29,72,000, had not been reported. The DIT held, in his own words as reproduced, that the transactions were within section 285BA(3), “which, inter-alia, includes any transaction of sale, or of transfer of right or interest in a property”, and levied Rs 1,15,100 under section 271FA. The Tribunal deleted the penalty under section 273B for reasonable cause, holding that the Office Memorandum of 10 May 2007 and rule 114E as it then stood “support the contention of the appellant” (paragraphs 6 to 8). That contention was that development agreements were not sale or purchase, but the appeal was decided on section 273B, not on reportability.

• Nikanth (Narol) Co-op. Shops and Off Society Ltd v. ITO (ITAT Ahmedabad, ITA 1814/Ahd/2024, assessment year 2018-19, pronounced 23 January 2025): a co-operative society landowner was assessed ex parte on Rs 60,51,000 of long-term capital gain on information from a “reporting authority”. It said it received nothing and the developer had accounted for the sale proceeds. The Tribunal remanded to verify the development agreement and whose proceeds they were, with costs of Rs 5,000. (Read from a copy of the order hosted by a third party.) The order does not say how the reported figure arose; in practice a landowner who joins a buyer’s sale deed as owner or confirming party should expect the gross sale value in his own AIS.
• Rakesh Motilal Sharma v. ACIT (ITAT Pune, ITA 1256/PUN/2025, assessment year 2018-19, pronounced 18 June 2026): under a JDA of 16 February 2018 Form 26AS showed Rs 14,33,25,000 as “sale of immovable property”; the owner said only a Rs 10 crore interest-free refundable deposit had been received, later forfeited on termination. The Assessing Officer taxed Rs 14.33 crore. The Tribunal remitted the case, holding that the land “is admittedly stock in trade”, so section 45(5A) was not relevant (paragraphs 9 and 10).
• Vasant Shivram Madhavi v. ITO (ITAT Pune, ITA 1716/PUN/2024, assessment year 2015-16, pronounced 22 April 2025): Insight information said the assessee “has sold immovable property for a total consideration of Rs.9,25,45,000/-“; the Index-II for one registered JDA showed a market value of Rs 5,24,13,000 and an agreement value of Rs 4,01,32,000, and the two were added as if they were two sales. He had offered his share in assessment year 2019-20 under section 45(5A); the matter was remanded.

The practical point follows. The landowner’s AIS for the JDA year will often show the registration as a sale at the stamp value. He should respond to the AIS entry, stating that the transaction is a development agreement and that the income is assessable in a later year (or was returned in the year of transfer), and disclose the agreement in the return for the JDA year by a note even though no gain is shown. The feedback options available for an immovable property entry were not verified for this series.

Reopening on JDA data: section 148, section 148A and the Gujarat High Court

A reassessment notice built on a registered JDA can be defeated where the year reopened was not the year of transfer or where the transaction was examined in a completed scrutiny, and the landowner has a strong but untested argument where section 45(5A) puts the charge in a later year; the Gujarat High Court has quashed two notices touching development agreements since 2022, one on search material and one on a scrutinised payment.

The procedure. For notices issued on or after 1 September 2024, section 148 as substituted by the Finance (No. 2) Act, 2024 permits a notice only on “information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment”, and sub-section (3)(i) treats as such information “any information in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time”; section 148A requires a show-cause notice “accompanied by the information”, the assessee’s reply, and an order with the approval of the specified authority. The time limits and the approving authority are on the section 149 and section 151 pages. Search cases follow other routes, set out below, and section 152(3) keeps searches, requisitions and surveys of 1 April 2021 to 31 August 2024 on the earlier text.

Chhaganlal Mulji Dholu v. JCIT (OSD) (Gujarat High Court, R/Special Civil Application 3406 of 2022, N.V. Anjaria and Bhargav D. Karia JJ., CAV judgment 25 November 2022, assessment year 2015-16) is the jurisdictional authority on cash in a development agreement. A notice under section 148 of 31 March 2021, under the procedure before section 148A, rested on information from a search on the Akshar Group: seized documents named the petitioner among six landowners of land at Revenue Survey Nos. 28, 29, 31 and 32, Gokulesh City Project, Dabhoi Road, Vadodara, under a development agreement with Gokulesh Infra, with cash of Rs 43,54,876 and cheques of Rs 44,16,000 against his 9.58 per cent share. He denied the cash and showed that the gain on the land, Rs 78,07,307, had been offered in assessment year 2016-17, when the sale deed was executed, and assessed in scrutiny on 10 December 2018. The Court held that “the transfer of land took place during the subsequent year, that is, 2016-17, since the transaction was in nature of development agreement” (paragraph 5.2), that “there is no tangible material on record to even prima facie show that assessee has received cash” (paragraph 5.4), and, in its own words at paragraph 6.1, “The income by way of capital gain is chargeable in the year of capital assessment [sic] even though the consideration may be realised earlier or later or there may not be realisation at all [a duplicated “or” omitted] … the execution of development agreement with Gokulesh Infra did not give rise to transfer within the meaning of section 2(47)(v) of the Act in the year 2014-15. Therefore, the entire basis of reopening was erroneous of facts and misconceived in law.” The notice was quashed. Part 1 discusses the Court’s reading of Balbir Singh Maini; for procedure, Dholu is authority that cash received under a development agreement before the transfer belongs to the transfer year, so a reopening of the receipt year fails; the Revenue will say the case also turned on the absence of any tangible proof of cash and on a later-year gain already assessed in scrutiny.

Laxmi Infra Developers Ltd v. ACIT (Gujarat High Court, R/Special Civil Application 7664 of 2022, A.S. Supehia and Pranav Trivedi JJ., pronounced 19 February 2026, assessment year 2018-19) is the developer’s mirror. A Surat company had paid for development rights in land at Borivali and SEEPZ, Mumbai, under a registered agreement; its assessment under section 143(3) of 25 January 2021 followed a scrutiny notice “specifically inquiring into the investment in property”. INSIGHT portal information that the payment for those rights had gone to Gitanjali Infratech Ltd., said to have moved funds to Mehul Choksi, led to notices under section 148A(b) and section 148 in 2022; the section 148A(d) order then shifted to the “source of the source” of a director’s unsecured loan, a point the show-cause notice had not raised (paragraph 17). The Court held that the agreement “was executed on a proper stamp paper and was registered with Sub-Registrar, Borivali, Mumbai and the entire consideration … was paid through banking channels” (paragraph 14), that the source-of-source proviso to section 68 “has been made effective from 01.04.2023, and was not the requirement prior to 01.04.2023” (paragraph 20), and that the petitioner “has categorically and specifically disclosed all the relevant information in the scrutiny proceedings” so the Department “after the scrutiny assessment cannot reopen the case” (paragraph 23). The notices were quashed.

Where section 45(5A) applies. No decision was traced that quashes a notice on the specific ground that section 45(5A) puts the gain in the certificate year, so no income was chargeable in the year of registration. The argument is strong on the text: for an individual or HUF whose transfer under a registered area-sharing agreement falls in previous year 2017-18 or later (section 45(5A) applies from assessment year 2018-19), section 45(5A) applies “Notwithstanding anything contained in sub-section (1)”, so information about the registration cannot “suggest” escapement in that year, and an order under section 148A(3) (section 148A(d) under the procedure before 1 September 2024) that does not deal with section 45(5A) has not dealt with the reply. The Revenue’s answer is that sufficiency is not tested at the section 148A stage and that whether the agreement is a specified agreement (registered? for a share? is the owner an individual?) is a question for the assessment. The reply should file the agreement and the certificate status and ask that the order address section 45(5A) expressly.

The 2025 Act. Section 280 and section 281 of the Income-tax Act, 2025 re-enact section 148 and section 148A; section 280(6) lists what “information” means, including information “as per the risk management strategy formulated by the Board”, and contains no deeming for searches. A notice for any tax year beginning before 1 April 2026 is issued, by section 536(2)(c), under the 1961 Act and “as per the procedure specified in the repealed Income-tax Act”. A notice for the certificate year of a JDA that matures in tax year 2026-27 or later runs under sections 280 and 281.

Penalty: under-reporting, misreporting and a debatable year

Penalty under section 270A follows a JDA addition where the landowner showed no gain, or showed it in a different year, but three lines of defence have worked: a bona fide explanation with all material facts disclosed (section 270A(6)(a)), the failure to specify the limb of misreporting, and the debatable character of the year of transfer itself.

In Subbalakshmamma Pinnama v. ITO (ITAT Hyderabad, ITA 1463/Hyd/2025, assessment year 2017-18, pronounced 19 November 2025) a landowner allotted 27 flats in lieu of land had filed no return; after a notice under section 148 dated 10 February 2020 she returned total income of Rs 1,50,68,940, which was accepted, and a penalty of Rs 17,55,303 for under-reporting followed. She had paid Rs 16,00,000 of self-assessment tax before the notice and explained the delay by disputes with the developer, a civil suit, a life interest and the applicability of section 45(5A). The Tribunal held the explanation “appears to be bona fide and genuine without any intention of under-reporting of income, arising on account of transfer of property in pursuant to the Joint Development Agreement” and that the case “falls under sub-section (6) of Section 270A” (paragraphs 10 and 11). The Revenue’s answer, put by the Departmental Representative and accepted by the Commissioner (Appeals), is that where income is first returned in answer to a section 148 notice the whole of it is under-reported, and that none of the exceptions in sub-section (6) applies.

In Reddappa Srinivasa v. DCIT (ITAT Bangalore, ITA 654/Bang/2026, assessment year 2018-19, pronounced 28 September 2026) a JDA landowner who had sold 38 of 44 flats received was assessed after a revision and charged a misreporting penalty of 200 per cent, Rs 1,59,72,186. The Tribunal cancelled it because neither the notice nor the order specified which limb of section 270A(9) was alleged (paragraphs 11 and 17), noting the contrary view of the Rajasthan High Court in Spun Well Tex Pvt Ltd v. ITO (25 August 2026) as described in the order, which was not read for this series, and the absence of a jurisdictional ruling. The Bench accepted that the Delhi High Court decision on which the coordinate Benches rest concerned immunity under section 270AA, not cancellation (paragraphs 15 and 16).

On the old law, Pramod Reddy Tekula v. DCIT (ITAT Hyderabad, ITA 2214/Hyd/2025, assessment year 2016-17, pronounced 12 June 2026) deleted a section 271(1)(c) penalty of Rs 9,05,448 on a JDA gain the Hyderabad Tribunal had taxed in the registration year, because “the issue of computation of capital gains in pursuant to development agreement is highly debatable at relevant point of time going by divergent views expressed by various Courts including the jurisdictional High Court” (paragraph 10). That is a coordinate Bench treating the JDA year-of-transfer question as debatable; it supports a bona fide explanation under section 270A(6)(a).

The general law is in the firm’s articles on specifying the limb and immunity and waiver. In the 2025 Act section 439 re-enacts section 270A, with fifty per cent in sub-section (9), two hundred per cent in sub-section (10) and the cases of misreporting in sub-section (11). From 1 April 2026 the Finance Act, 2026 added clause (g) to that list, “income referred to in section 195(1)(b)”, so an addition under sections 102 to 106 that the assessee did not return, the usual form of an on-money addition, is misreporting by definition. Section 536(2)(d) keeps penalty for any tax year beginning before 1 April 2026 under the 1961 Act.

Search and on-money on both sides of a JDA

On-money in a JDA is cash paid by the developer to the landowner over the recorded price, and cash collected by the developer (or by a landowner who sells units himself) from buyers over the registered value. A search turns it into an addition; how, and against whom, depends on the date the search was initiated and on whether the landowner admits the cash.

Which regime. Section 536(2)(v) of the 2025 Act provides that “where a search has been initiated under section 132 or requisition is made under section 132A prior to the commencement of this Act, the provisions of repealed Income-tax Act, shall continue to apply to any proceedings connected in respect of such search or requisition”, and the Board’s FAQ 6 of July 2026 reproduces it and adds that the section 131(1) powers of the 1961 Act continue “for post search inquiries and also for assessment”. So the regime is fixed by the date of the search: up to 31 March 2021, sections 153A and 153C, with section 153C for a landowner named in the developer’s papers; from 1 April 2021 to 31 August 2024, reassessment with Explanation 2 to section 148 as it stood before 1 September 2024, which section 152(3) keeps in force for those searches; from 1 September 2024 to 31 March 2026, the block assessment in Chapter XIV-B, with section 158BD for the other person; and from 1 April 2026, sections 292 to 301 of the Income-tax Act, 2025, where section 292(1) requires the Assessing Officer, for a search initiated “on or after the commencement of this Act”, to “assess or reassess the total undisclosed income of the block period”, with section 295 for the other person. The Board’s FAQ 7 says only that for such a search the powers under section 246 of the 2025 Act, the counterpart of section 131, are to be used “for post search inquiries and also for assessment”; whether section 536(2)(c) keeps the pre-2026 years of the block on the 1961 Act has not been decided. Sections 280(6) and 281(4) contain no search deeming, so a search case is never routed through section 281. The section 153C note covers the satisfaction note, the handover date and section 295.

Presumptions. Section 132(4A) and section 292C presume that books, documents and money “found in the possession or control of any person” belong to “such person” and that their contents are true. Against the landowner the presumption does not run by its words, though the Ahmedabad Bench in Pravinbhai Keshavbhai Patel (2014) carried it to the other person on a section 153C handover; the argument both ways, and the need for corroboration and cross-examination, are in the firm’s notes on section 153C, cross-examination and extrapolating a seized cash book.

The landowner’s position. Cash received for land under a development agreement has a known source: the transfer. The landowner’s case is that it is consideration, computed under sections 45 and 48 with cost and, where available, section 54 or 54F, in the year of transfer, or added to the stamp duty value of his share in the certificate year under section 45(5A); it is not money of unknown source under section 69A taxed gross under section 115BBE. Dholu supports the year-of-transfer half. Vasant Shivram Madhavi shows “Total On money of Rs.2 Crores” written into the registered JDA itself and offered as capital gain under section 45(5A). The Revenue’s best argument turns on denial: a landowner who, like Dholu, denies the cash and is then confronted with seized proof, cannot easily convert the cash into consideration with a known source, and the Revenue will tax it under section 69A in the year of receipt at the special rate. The Revenue relied in Dholu on two Gujarat High Court decisions, Heval Navinbhai Patel and Kiran Ravjibhai Vasani, which it described as upholding reopenings on seized evidence of cash above the deed value (paragraphs 4.2.2 and 4.2.3); they were not read for this series. The rate under section 115BBE is 30 per cent for assessment years 2013-14 to 2016-17 and 60 per cent from assessment year 2017-18, before surcharge and cess, with no deduction or set-off; its 2025 Act counterpart, section 195, was cut from 60 to 30 per cent by the Finance Act, 2026 with effect from 1 April 2026.

The developer’s position. Cash paid to landowners recorded in seized papers is pleaded by the Revenue as unexplained expenditure (section 69C) or investment (section 69 or 69B), funded by on-money from buyers. The developer’s answer is telescoping: if the on-money receipts are taxed, the cash paid out of them for the land is part of the cost of the development rights, so only the profit embedded in the on-money is income. The Ahmedabad Tribunal taxed only the profit element in Radhe Developers (Anand) (IT(SS)A 164 to 166 and 199 to 201/Ahd/2018, 3 August 2022), a split development in which a group company sold the land and the firm built: on-money of Rs 6,20,87,908 and extra-work receipts of Rs 2,82,09,952 found in a search of 26 April 2013 were taxed at a 25 per cent profit element (paragraphs 5.1 to 5.7), and additions resting on buyers’ statements under section 131, given without copies or cross-examination, were deleted (paragraph 8.5). Where the landowner sells the units and collects the price himself, as in Mohanbhai D. Bharwad, the Revenue assessed the on-money to him and taxed the developer only on its 12.5 per cent fee, which the Commissioner (Appeals) upheld; the Tribunal restored the developer’s appeals on the year (paragraph 10). The Revenue’s reply is that telescoping needs proof that the land payments came out of the receipts taxed: where the cash went out before the on-money came in, or the receipts are an estimate, it taxes the payment under section 69C as well. The extrapolation note discusses estimation of the profit; Part 5 deals with the cost of land.

The Ahmedabad decisions. Three are directly on JDAs.

• Madhusudan Special Selections Pvt. Ltd. (DCIT v., ITAT Ahmedabad “D” Bench, Narendra Prasad Sinha (Accountant Member) and Sanjay Kumar (Judicial Member), ITSSA 198/Ahd/2021, assessment year 2018-19, pronounced 19 August 2026). A search on the SSS Group on 6 March 2018 produced eleven pages: a development agreement of 23 January 2014 by which the assessee company gave its former factory land at Naroda to Srushti Developers, and two pages of jottings with no name, project, date or signature. The Assessing Officer added Rs 5,47,66,500 under section 69A read with section 115BBE on the footing that the company was entitled to half the cash the developer collected from buyers. The satisfaction note covered assessment years 2012-13 to 2017-18, not 2018-19. On the merits the Commissioner (Appeals) had accepted the director’s explanation that the jottings were estimates of what the developer might collect, noted that the agreed price of Rs 24,500 a square metre was “3.2 times the amount of jantri rate” and that the developer had not paid even the agreed amounts. The Tribunal held that the Revenue “has been unable to controvert” those findings and that “recording of satisfaction is sine qua non for initiation of assessment u/s 153C”, no satisfaction having been recorded for the year (paragraph 8). The Revenue’s appeal was dismissed.
• Mohanbhai D. Bharwad v. DCIT and Sanghvi Developers v. DCIT (ITAT Ahmedabad “C” Bench, IT(SS)A 188 to 191/Ahd/2015, assessment years 2010-11 and 2011-12, pronounced 19 December 2019). A search on the Sanghvi Group on 9 March 2011 found a loose file recording cash of Rs 1,69,51,000 on the sale of shops in “Dharabhai Complex”, Nava Vadaj, built on the landowner’s land, the developer taking “development fees computed at the rate of 12.5% of the total collection”. The landowner, who collected the proceeds himself, was assessed under section 153C on 87.5 per cent; the Tribunal quashed his assessments because the Revenue “failed to furnish the documentary evidences demonstrating that satisfaction of the assessing officer of the search person was recorded”, following Circular 24/2015.
• DCIT v. Mukesh Jamnadas Shah (ITAT Ahmedabad, IT(SS)A 201 to 203/Ahd/2019, assessment year 2015-16, pronounced 27 March 2023). After the Akshar Group search of 22 September 2015, which covered the assessees, the Assessing Officer relied on a development agreement for land at Gotri, Vadodara (the seized copy signed only by the developer and neither notarised nor registered; a signed version of 25 September 2014 was produced later) to tax Rs 42,05,18,483 in the agreement year; the landowners had offered their gains deed by deed as sale deeds were executed. The Revenue’s appeal failed because the registered sale deeds showed that possession remained with the owners (paragraph 6.1).

A registered JDA as incriminating material. Elsewhere the Revenue has done better where the JDA itself was registered and recited possession. In DCIT v. R. Muniraju (HUF) (ITAT Bengaluru, ITA 54/Bang/2020 and CO 2/Bang/2022, pronounced 13 October 2022) a registered JDA seized at the karta’s residence in a search under another company’s warrant was held to be incriminating material for section 153C because, in the Bench’s words, “if the document has a bearing on the determination of the total income of the assessee, then the same can be considered as incriminating” (paragraphs 19 and 20); the gain stayed in the agreement year, though at guideline value, not the developer’s construction cost. In Bandi Sudheer Reddy, Pramod Reddy Tekula and Venkata Rajasekhar Koneru v. ACIT (ITAT Hyderabad, ITA 610, 611 and 627/Hyd/2022, pronounced 22 October 2024), a registered development agreement cum GPA with Giridhari’s Vue, seized at the residence of Allam Raja Reddy in a search of 26 April 2018 on a construction group (the order names it both “Gandhari” and “Giridhari”), was taxed in the registration year under section 153C, following the jurisdictional High Court in Potla Nageswara Rao; that order’s statement that Balbir Singh Maini held the year of registration to be the year of transfer misreads the Supreme Court and should not be repeated. On the other side, ACIT v. Lakkanna Durgappa (ITAT Bangalore, ITA 2858, 2859, 3032 and 3125/Bang/2025, pronounced 11 May 2026) dismissed the Revenue’s appeals for assessment years 2017-18 to 2019-20 after a search of 19 February 2020 because registered JDAs and occupancy certificates disclosed before the search were not incriminating material (Abhisar Buildwell). The year-of-transfer conflict between these Benches is decided in Part 1.

Block assessment after 1 September 2024. Section 158B(b) defines “undisclosed income” to include income based on any entry or transaction representing “income or property which has not been or would not have been disclosed”; section 158BB(1A) excludes income returned before the search; section 158BB(4)(b) applies sections 68 to 69C “so far as may be”; and section 113 charges the block at sixty per cent. A landowner whose section 45(5A) year has not arrived will say JDA cash is not income that “would not have been disclosed”; the Revenue will say cash recorded nowhere and denied is undisclosed. No decision under the revived Chapter was traced. Under the 2025 Act the computation is in section 293, which applies sections 102 to 105 “so far as may be”, and the rate in section 192 is sixty per cent.

JDAs that straddle 1 April 2026: section 536 clause by clause

A JDA registered under the 1961 Act whose completion certificate issues on or after 1 April 2026 is charged in the tax year of the certificate, but which statute supplies the computation is open: section 67(14) of the Income-tax Act, 2025 on its own terms, or section 536(2)(h), as substituted by the Finance Act, 2026, which carries the 1961 rule forward. The Board’s “Clarificatory Frequently Asked Questions” on section 536 (released 6 July 2026; 23 questions) say nothing about capital gains, section 45(5A), specified agreements or income deferred to a later year, so no Board view is known.

Section 67(14). It charges a gain arising to an individual or HUF “from the transfer of a capital asset, being land or building or both, under a specified agreement” “for the tax year in which the certificate of completion for the whole or part of the project is issued”, and section 67(15)(b) defines a specified agreement as “a registered agreement” of the described kind without asking under which Act it was registered. Unlike section 67(1), it does not require the transfer to be effected in a tax year under the 2025 Act. So a 2022 agreement with a 2026-27 certificate is caught, and section 67(14)(b) fixes the full value as the stamp duty value of the share on the certificate date “as increased by any consideration received in cash or by a cheque or draft or by any other mode”. The cost of the flats for a later sale is then section 73(1), Table serial 20.

Section 536(2)(h), as substituted. From 1 April 2026 clause (h) reaches any sum that “has not been included in the total income of any person, either on account of fulfilment of certain conditions or for any other reason, for any tax year beginning before the 1st April, 2026”, where it “was required to be included in the total income of any subsequent tax year including beginning on or after the 1st April, 2026 under the repealed Income-tax Act, if it had not been so repealed”. Such a sum is “deemed to be the income of such subsequent tax year” and included “under the same head of income as it would have been included under the repealed Income-tax Act”. The enacted clause was confined to “violation of such conditions”; the words “or for any other reason”, added twice in 2026, are what bring a section 45(5A) deferral in. A gain on a transfer in 2022-23, kept out of that year by section 45(5A) and required by it to be included in the certificate year, fits the words.

For the landowner, both routes lead to the same year and head. The rate is less certain. Section 197 of the 2025 Act charges 12.5 per cent, with the comparison in section 197(3) for a resident individual or HUF’s land acquired before 23 July 2024, and has no rate for a transfer that took place before that date; the 1961 Act’s section 112(1)(a) charges twenty per cent with indexation on a transfer that took place before 23 July 2024, and whether a section 45(5A) transfer takes place at the agreement or at the certificate is the open question argued in Part 2. The practical difference is the computation and, later, the cost of the flats: clause (h) speaks of “such sum” as the 1961 Act would have included it, pointing to sections 45(5A), 48, 49 and 55, while section 67(14) points to sections 72, 73 and 90. Against clause (h) applying, the Revenue (or a landowner who prefers section 67(14)) will say it presupposes a “sum” identified in the earlier year and merely shifted, whereas a section 45(5A) gain cannot be quantified until the certificate fixes the stamp duty value; and that a specific charging provision prevails over a general saving. Neither reading has been tested.

The Revenue’s alternative. At full strength: section 45(5A) only defers a gain that arose in the year of transfer; once the 1961 Act is repealed, the deferral cannot operate in a 2025 Act year, the gain belongs to the transfer year under section 45(1), and section 536(2)(c) keeps that year open under the 1961 Act’s procedure. The answer is that section 45(5A) opens “Notwithstanding anything contained in sub-section (1)”, that both section 67(14) and clause (h) supply a later year, and that a reopening of the transfer year faces the 1961 time limits that clause (c) preserves. The Revenue’s argument is stronger for a landowner who was never within section 45(5A) (a company, firm or trust; an unregistered agreement), whose gain always belonged to the year of transfer.

The other clauses. Clauses (a) and (b) save the “previous operation” of the 1961 Act and any “right, privilege, obligation or liability acquired, accrued or incurred” under it: the landowner says the right to defer was acquired when he transferred under a specified agreement, the Revenue that nothing accrued before the certificate. Clause (b) also preserves a developer’s obligation to deduct on a credit before 1 April 2026. Clauses (c) and (d) keep proceedings and penalty for tax years beginning before that date on the 1961 Act. Clause (j) continues approvals and certificates issued under the 1961 Act (FAQ 21), but a JDA is a private contract, not an agreement “entered into … under any provision of the repealed Income-tax Act”, so it does not save the JDA’s tax treatment. Clause (v) keeps a pre-2026 search on the 1961 Act. Clause (e) continues proceedings pending on that date, a section 201 order under appeal among them, as if the 2025 Act had not been enacted, and clause (i) lets a 1961 demand be recovered under the 2025 Act. Clause (g), as substituted by the Finance Act, 2026, applies the 1961 Act’s interest provisions, for the period from 1 April 2026, to a refund falling due or a default made on or after that date in a proceeding for an earlier tax year, at the 2025 Act’s rate once that rate is modified: it governs the refund of the landowner’s carried-forward credit for assessment year 2026-27 and interest on a 1961 demand that falls into default after that date; whether section 201(1A) interest on a failure to deduct before 1 April 2026 is a default “made on or after” that date is not answered by the clause or the Board’s FAQs, and no decision was traced. Clause (k) does not revive an appeal or application already out of time on 1 April 2026, and clause (n) carries forward a 1961 capital loss in the 1961 manner. Clause (h) on its words also reaches the section 54F(2), 54F(3) and 54EC(2) clawbacks and an unutilised deposit under section 54(2) or 54F(4) where the event falls in a later tax year; whether it preserves the section 54(1) cost reduction, which is not a “sum”, is less clear (Part 2 discusses section 54F(3)).

TDS across the date. Cash credited or paid on or after 1 April 2026 falls under section 393(1), Table serial 3(ii): “Any consideration, not being consideration in kind, under the agreement referred to in section 67(14)”, payer “Any person”, ten per cent, threshold “Nil”, with Note 2 providing that where serials 3(i) and 3(ii) both apply, “tax shall be deducted under 3(ii) only”. The lead-in to section 393(1), read for this Part, preserves the timing rule: deduction “at the time of credit of such income or sum to the account of the payee or at the time of its payment in cash or by way of a cheque or a draft or by any other mode, whichever is earlier”. So an instalment credited before 1 April 2026 and paid after it was deductible under the 1961 Act at the credit, and clause (c) points against deducting again; the Revenue could still read “paid … during the tax year” in the lead-in as a fresh trigger, and no decision or Board statement on the point was traced. Credit for 2025 Act deductions is governed by rules under section 390(6)(b), which provides for “the tax year for which the credit may be given”; the counterpart of rule 37BA in the Income-tax Rules, 2026 could not be verified for this series, so no rule number is given here.

The cost gap. Section 73(1), Table serial 20 gives the flats a cost only by reference to section 67(14), so flats from a gain charged under the 1961 section 45(5A) and sold under the 2025 Act fall outside its words; that gap is argued in Part 2.

Gujarat: what the record shows

The Gujarat record on JDA procedure is about reopening and search, not withholding: no Ahmedabad, Surat or Rajkot order was found on section 194-IC, on a section 270A penalty for a JDA landowner, or on AIS feedback for a JDA entry.

• Gujarat High Court. Chhaganlal Mulji Dholu (25 November 2022): reopening on Akshar Group search material quashed, cash under a development agreement belonging to the year of transfer. Laxmi Infra Developers (19 February 2026): developer’s reopening on a scrutinised development-rights payment quashed. Navinchandra N. Patel (6 August 2026): reopening of a land trader’s per-unit development agreement failed for want of fresh tangible material; the section 45(2) theory was never adjudicated. Swastik Engg (1 December 2014), a block assessment after a 2002 search in which the 1994 development agreement fell outside the block period, is discussed in Part 1.
• Ahmedabad Bench. Sub-Registrar, Bavla (2018): Department treated two registered development agreements as reportable; penalty deleted for reasonable cause. Nikanth (Narol) (2025): society landowner assessed ex parte on reporting-authority data; remanded. Madhusudan Special Selections (2026) and Mohanbhai D. Bharwad (2019): section 153C additions on JDA on-money failed for want of a satisfaction note, Madhusudan also on the merits. Mukesh Jamnadas Shah (2023): agreement-year addition after the Akshar Group search deleted because the owners’ sale deeds showed possession had stayed with them.
• Surat Bench. Hiteshkumar Mohanlal Desai (2026): registered cash JDA for Rs 24 crore, deduction at one per cent on a figure many times the receipt, addition deleted on actual receipts and co-owner parity; section 45(5A) not decided.

The Ahmedabad Bench treats Mumbai, Bangalore and Hyderabad orders as coordinate Bench decisions: it follows them on like facts or refers a disagreement to a Special Bench under section 255(3) (section 364(4) of the 2025 Act). Where coordinate Benches conflict, as Hyderabad and Patna do on registered JDAs, the Bench may follow the view it finds applicable on like facts or refer the conflict under section 255(3); a reference is the course an assessee should ask for where the conflict is squarely on his facts.

Open questions in Part 6, argued both ways

Nine procedural questions remain open, each set out with the argument on both sides.

1. Does section 194-IC reach a company, firm or society landowner? For the Revenue: the payee need only be “a resident”, and the definition of specified agreement speaks of “a person owning land”. For the developer: “the agreement referred to in sub-section (5A)” is one under which that sub-section operates, which needs an individual or HUF; a ten per cent withholding with no threshold has no fit with a company’s tax. Undecided.

2. Can a resident landowner get a lower deduction certificate for JDA cash paid from 1 April 2026? For the landowner: section 395(1) applies to “any income or sum under this Chapter”, with no list. For the Revenue: it applies “subject to the rules”, which may keep the 1961 exclusions. Depends on rules not verified here.

3. Must the processing centre allow credit carried forward to the certificate year? For the landowner: rule 37BA(3)(i) gives credit “for the assessment year for which such income is assessable”, and section 45(5A) fixes that year. For the Revenue: sub-rule (4) makes credit “subject to verification”, and a claim that does not match Form 26AS is properly queried. Rectification or appeal is the remedy; no landowner-side decision was traced.

4. Are conditional deposits and delay compensation consideration? For the developer: on Nathani Parekh’s test, only money paid “as part of a share” is consideration, and Prestige Estates held a refundable deposit outside section 194-IA. For the Revenue: a deposit adjusted against the share or forfeitable on default is price from the start, and delay money is paid “under the agreement”.

5. On what does one per cent run where section 194-IA applies to JDA cash? For the Revenue: the stamp value assessed on the registered JDA, since what passes is an interest in the land itself. For the developer: Explanation (b) to section 194-IA defines “immovable property” as land or a building, without rights in them, and a deposit or deferred price is not consideration for a transfer.

6. Can a section 148 notice survive where section 45(5A) puts the gain in the certificate year? For the landowner: nothing is chargeable in the registration year, so the information cannot “suggest” escapement. For the Revenue: whether the agreement is a specified agreement is for the assessment, not the section 148A stage.

7. Is JDA cash “undisclosed income” in a block assessment before the certificate year? For the landowner: it “would have been disclosed” in the certificate-year return. For the Revenue: cash recorded nowhere, and denied, is undisclosed. No decision under the revived Chapter XIV-B.

8. For a 1961 JDA maturing after 1 April 2026, does section 67(14) or section 536(2)(h) compute the gain? For section 67(14): it is the specific charge and does not ask when the agreement was signed. For clause (h): it reaches a sum kept out of an earlier year “for any other reason” and fixes the 1961 head and computation. Untested; the Board’s FAQs are silent.

9. Is money paid after the certificate “received” for section 45(5A) or section 67(14)(b)? Argued both ways in Part 1; Table 5 above shows what turns on it.

A practitioner’s checklist

Each step below states the risk it guards against.

1. Classify each payment before the first cheque. Risk: a wrong section costs the developer nine per cent of every instalment under section 201(1).
2. Keep deposits refundable and separate from the share. Risk: an adjustable deposit is treated as consideration from the day it is credited.
3. For cash paid from 1 April 2026, apply under section 395(1); none is available for section 194-IC cash under the 1961 Act. Risk: ten per cent locked for years with no remedy until the certificate year.
4. Carry the credit forward to the certificate year with a note. Risk: credit claimed in the deduction years is withdrawn and the certificate year carries the whole tax.
5. Fix the deductee’s name. Risk: under rule 37BA(2) credit stays with the named co-owner, karta or attorney unless the declaration is filed and the deductor reports in the right names.
6. Answer the AIS entry for the registration year. Risk: an unexplained registration value is the information a section 148A notice will attach.
7. On a section 148A notice, put section 45(5A), the transfer year and any scrutiny on record. Risk: an order that does not address them is harder to attack later.
8. If on-money is alleged, decide early whether the cash is admitted as consideration. Risk: denial forfeits the known-source answer and invites section 69A at the special rate.
9. In a search case, ask in writing for the satisfaction note for each year. Risk: Madhusudan and Mohanbhai Bharwad were won on the note, which must be demanded to be tested.
10. Developers: keep the landowner’s certificate-year return and Form 26A in the file. Risk: without them the first proviso to section 201(1) cannot be proved.
11. For JDAs maturing after 1 April 2026, compute under both section 67(14) and the 1961 rules. Risk: an unexplained choice invites the other reading; disclose the basis.

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

This is the series’ master table of every pair whose 2025 Act text was read; provisions the series uses without a verified counterpart, such as rule 37BA, section 285BA and the presumption in section 292C, are left out rather than guessed.

Subject	Income-tax Act, 1961	Income-tax Act, 2025
Capital asset; agricultural land	s.2(14); (iii)	s.2(22); (iii)(A), (B) and Table
Short-term capital asset; holding period	s.2(42A), Expl. 1	s.2(101)(a) to (c)
Short-term capital asset: previous owner’s holding	s.2(42A), Expl. 1(i)(b)	s.2(101)(c)(B)(I)
Transfer	s.2(47)(i), (ii), (iv), (v), (vi), Expl. 2	s.2(109)(a), (b), (d), (g), (f), (h)
Rights in land as immovable property	s.2(47) Expl. 1, applying s.269UA(d) and the Explanation to (d)(i), for s.2(47)(v) and (vi) only	definition of “immovable property” in s.2(109)
Stamp duty value	s.45(5A) Expl. (iii)	s.2(105) (term)
Agricultural land compulsorily acquired	s.10(37)	Schedule III, Sl. No. 18 and Note 3
Charitable trusts: capital gain reinvested	s.11(1A)	s.341(9), (10)
Charitable trusts: modes of investment	s.11(5), incl. (x)	s.350 and Schedule XVI
Accumulated income invested	s.11(2)(b)	s.342(4)
Registration	s.12A, s.12AB	s.332 (heading read)
Investment outside permitted modes	s.13(1)(d)	s.337 Table, clause 4
Benefit to related persons	s.13(1)(c), (2), (3)	s.337 Table, clause 2; s.355
Deemed transfer on distribution to a partner	s.9B	s.8
Specified business deduction	s.35AD	s.46
Disallowance for failure to deduct	s.40(a)(ia)	s.35(b)(i)
Stamp duty value for stock in trade	s.43CA	s.53
Construction and service contracts	s.43CB	s.57
Capital gains: charge	s.45(1)	s.67(1)
Conversion into stock in trade	s.45(2)	s.67(6)
Depository	s.45(2A)	s.67(7), (8)
Capital asset introduced into a firm	s.45(3)	s.67(9)
Reconstitution of a specified entity	s.45(4)	s.67(10), (11)
Compensation on acquisition	s.45(5)	s.67(12), (13)
Specified agreement; proviso; Explanation	s.45(5A), proviso, Expl.	s.67(14), (16), (15)
Distribution on partition of an HUF	s.47(i)	s.70(1)(a)
Conversions not regarded as transfer	s.47(xiii), (xiiib), (xiv)	s.70(1)(zd), (ze), (zf)
Computation; indexed cost	s.48	s.72; s.72(2)
Cost by mode of acquisition	s.49	s.73(1), Table
Cost of property taxed under s.56(2)(x)	s.49(4)	s.73(1), Sl. No. 17 (refers to s.92(2)(m) only)
Cost of share under a specified agreement	s.49(7)	s.73(1), Sl. No. 20 (refers to s.67(14) only)
Stamp duty value as full value; tolerance; Valuation Officer	s.50C; third proviso; s.50C(2)	s.78; s.78(1)(b); s.78(2)
Fair market value where consideration not ascertainable	s.50D	s.80
Advance money received	s.51	s.81
Residential house	s.54	s.82
Agricultural land	s.54B	s.83
Specified bonds	s.54EC	s.85
Residential house from other assets	s.54F	s.86
Cost of acquisition and improvement; nil cost of rights not purchased; 2001 value and cap	s.55(1)(b); s.55(2)(a); s.55(2)(b) and proviso	s.90(1); s.90(3); s.90(9), (10)
Forfeited advance	s.56(2)(ix)	s.92(2)(h)
Property received for inadequate consideration; “property”	s.56(2)(x); Expl. (d) to s.56(2)(vii)	s.92(2)(m); exclusions s.92(3); s.92(5)(f)
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)
Cash credits	s.68	s.102
Unexplained investment	s.69; s.69B (investment)	s.103
Unexplained money and assets	s.69A; s.69B (asset)	s.104
Unexplained expenditure	s.69C	s.105
Housing projects	s.80-IBA	s.142 (grandfathering by reference)
Long-term capital gains; pre-23 July 2024 comparison	s.112(1)(a); second proviso to s.112(1)(a)	s.197(1)(b); s.197(3)
Block assessment rate	s.113	s.192 (enacted text)
Rate on unexplained income	s.115BBE	s.195 (30% from 1 April 2026; enacted 60%)
Minimum alternate tax; alternate minimum tax	s.115JB; s.115JC	s.206(1); s.206(2) (mapping; current rates not read)
Reassessment notice; information	s.148(1); s.148(3) (Expl. 1 before 1 September 2024)	s.280(1); s.280(6) (no search deeming)
Procedure before notice	s.148A	s.281
Search assessment of another person	s.153A, s.153C	no direct counterpart; block regime ss.292 to 301; other person s.295
Block assessment: computation; other person	s.158BB; s.158BD	s.293; s.295
Legal representative	s.159	s.302
Representative assessee	s.160; s.161(1)	s.303; s.304(1)
Trust carrying on business	s.161(1A)	s.307(3), (4)
Shares of beneficiaries unknown	s.164	s.307(1)
Shares of AOP members unknown	s.167B	s.311 (heading)
Executors	s.168	s.312
Assessment after partition of an HUF	s.171	s.315
Immovable property; specified agreement; compensation	s.194-IA; s.194-IC; s.194LA	s.393(1), Table Sl. Nos. 3(i), 3(ii), 3(iii); Notes 1 to 3
Time of deduction	earlier of credit or payment (s.194-IA, s.194-IC)	s.393(1)(c)
Payments to non-residents	s.195	s.393(2), Table Sl. No. 17
Lower deduction certificate; payer’s application	s.197; s.195(2)	s.395(1); s.395(2)
Credit for tax deducted	s.199	s.390(5), (6)
No default where payee has paid	s.201(1), first proviso	s.398(2)
Single Member; Special Bench; difference of opinion	s.255(3); s.255(3); s.255(4)	s.364(3); s.364(4); s.364(5)
Penalty for under-reporting and misreporting	s.270A	s.439 ((9) 50%, (10) 200%, (11) cases, incl. (g) from 1 April 2026)
Carry forward of 1961 capital losses	s.74	s.536(2)(n)
Repeal and savings	(not applicable)	s.536, incl. (2)(a) to (k) and (v)

The 2025 Act entries were read on the Income Tax Department’s website with the page’s Act field showing “Income-tax Act, 2025”. Sections 2, 8, 35, 53, 57, 67, 70, 72, 73, 78, 80, 82, 83, 85, 86, 90, 195, 197, 302, 390, 393, 395, 398, 439 and 536 were read in the current (Year 2026) edition; the others in the enacted (Year 2025) edition, where no later edition was found, so a 2026 amendment to them cannot be excluded. The Income-tax Rules, 2026 counterpart of rule 37BA is omitted because it could not be verified.

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.