Chartered accountants have warned that the absence of registration for a Joint Development Agreement (JDA) between the landowner and developer in Indore could result in the rejection of approval from the Real Estate Regulatory Authority (RERA). This, in turn, may cause project delays and hinder the sale of units.
Professionals have reported that numerous real estate projects in Indore have been denied permission by RERA because of the absence of a registered Joint Development Agreement (JDA). CA Mausam Rathi, Chairman of the Indore Branch, emphasized the significance of the JDA as the primary document encompassing all agreed-upon terms and conditions between the developer and the landowner. Rathi stated that registering the JDA is mandatory to prevent actions from tax departments and delays in obtaining approval from RERA. The non-registration of JDAs has resulted in the failure of many real estate projects to secure approval from RERA.
According to Rathi, a Joint Development Agreement (JDA) that is not registered is not recognized by the Income Tax or Goods and Services Tax departments. This non-registration can potentially lead to scrutiny and action from tax authorities during assessment processes. Chartered accountants shared their expertise on JDAs in relation to real estate during a seminar organized by the Indore A branch of ICAI. CA Prashant GS from Bangalore, one of the speakers, explained that as per Section 45A of the Income Tax Act if a landowner enters into a JDA (ratio deal) with an individual, HUF developer, or builders, the liability of capital gains for the landowner will only arise upon obtaining the completion certificate.
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