Property: Land: Sale

Capital assets are transferable from one person to another. Any profits or gains arising from the tranfer of a capital asset effected in the previous year shall be chargeable to income-tax under the head 'capital gains', and shall be deemed to be the income of the previous year in which the transfer took place. Capital gain is accrued by two ways, i.e. (1) short-tern capital gain is a capital gain arising from the tranfer of a short-term capital asset, and (2) long term capital means capital gain arising from the transfer of a long term capital asset.

Thanks for the responce.

My quarry: A plot of land is being given for development. Normally the landowner receives construted property as his share. What happens if the landowner opts for receiving money?

Point 1: an agreemnt is being signed. The landowner opts for receiving money instead of constructed property.

Point 2: developer at his own cost will get all sanctions and then sell it to prospective flat buyers, who will pay in a construction linked progressive manner.

Point 3: as and when will payment is received from the prospective buyers, the landowner agrees to pay the land owner.

The question: When does the CAPITAL GAIN take place?

i. at the time of sgning the agreeemnt? (at point 1)

or

ii. as and when the payment is received? 

Would be obliged to receive opinuions.

Thank you.