By S&S Co. Advocates & Solicitors · Published 28 September 2026 · Informational content, not legal advice: see our disclaimer
Overview
A guide for landowners and developers entering a JDA on how to structure the agreement, when capital gains tax is triggered, GST treatment of development rights, and RERA registration obligations for the resulting project.
What You Need to Know
- What a JDA is: landowner contributes land, developer constructs and typically shares built-up area/revenue with the landowner
- Section 45(5A) of the Income Tax Act: for individual/HUF landowners, capital gains on the transfer of land under a JDA are taxed in the year the completion certificate is issued, not the year of transfer, provided consideration includes a share in the constructed property
- GST: transfer of development rights by the landowner to the developer generally attracts GST under reverse charge on the developer, exempt to the extent of units sold before the completion certificate
- TDS under Section 194-IC: developer must deduct 10% TDS on any cash component paid to a resident landowner under a JDA, with no threshold exemption
- RERA registration obligations that attach to the developer once the JDA project qualifies as a 'real estate project'
- Common drafting pitfalls: revenue-share vs area-share models, possession/handover timelines, indemnity for pre-existing title defects, and what happens on developer default
Frequently Asked Questions
Who typically bears construction risk in a JDA?
The developer, who contributes construction cost and expertise in exchange for a share of the built-up area or sale proceeds, while the landowner contributes the land.
Does a JDA trigger tax at the point of signing?
Capital gains and GST implications generally turn on when possession or development rights are actually transferred and when consideration (including any area-share) is received or accrues, not simply the date the agreement is signed.
Does RERA apply to a project built under a JDA?
Yes, both the landowner and the developer can be treated as 'promoters' under RERA in relation to the project, depending on the JDA's terms, with corresponding registration and disclosure obligations.
References & Further Reading
This guide references the following statutes, rules and sources, cross-checked at the time of writing.
- Section 45(5A) capital gains timing rule and its applicability limited to individuals/HUFs: confirmed via cleartax.in, adityabirlacapital.com
- Section 194-IC 10% TDS with no threshold: confirmed
- GST reverse charge on development rights, exemption tied to units sold pre-completion-certificate: confirmed
- See also our Real Estate & RERA Notable Judgments and Legal Updates: Real Estate & RERA archive.