Applicability of Sec 45(5A)

      Section 45(5A) applies whereon individual/HUF owning land/building/both enters into a registered agreement with a developer allowing the developer to develop a real estate project on such land/building/both.

      As a consideration for receiving the right to develop the real estate project, the developer shares a portion of land/building/both in the project with the individual/HUF. In some cases, the developer might also pay some additional consideration in cash over and above the share in project.

Year of Taxability of Capital Gains

               Capital gains shall be computed in the hands of individual/HUF in the year in which the possession of immovable property is handed over to the developer for development of a project.

      Capital gains so computed shall be considered as income of the previous year in which the certificate of completion for the whole or part of the project is issued by the competent authority.

Full Value of Consideration

SDV of land/building/both in the project handed over by the developer to individual/HUF as his share as on the date of issue of the aforementioned completion certificate


Cash received by the individual/HUF from the developer, if any

Note: The full value of consideration adopted for calculating capital gains u/s 45(5A) shall be deemed as the cost of acquisition of the share in the hands of individual/HUF.


The beneficial provisions stated u/s 45(5A) shall not apply where transfers his share in the project to any
other parson on or before the date of issue c= aforementioned completion certificate. In such cases, capital gains would be taxable in -re scar in which possession of immovable property is herded over to the developer for development of project.

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