The process uses publicly available data from regulatory agencies and compares it with information in tax returns.
The Central Board of Direct Taxes (CBDT), the apex policymaking authority for Personal Income Tax and Corporate Tax, has advised its field formations to adopt the ‘Kolkata Model’ for assessing capital gains arising from Joint Development Agreements (JDAs).
This guidance is significant because, following the implementation of the Finance Act 2017, a new provision—Section 45(5A)—was introduced in the Income Tax Act. Under this section, capital gains are taxable in the previous year in which the competent authority issues the completion certificate for the whole or any part of the project. The full value of consideration is deemed to be the stamp duty value of the landowner’s share in the project on the date the completion certificate is issued, in addition to any monetary consideration received.
