Written for someone deciding whether to hand a plot to a builder — what the agreement does, what decides your share, and what the tax turns on. No part of this is a pitch.
General information · Not legal or tax adviceIn a joint development you do not sell your land. You keep the title. What you grant the builder is a licence to enter the plot and develop it, usually through a power of attorney executed alongside the agreement.
That distinction matters more than anything else on this page. The power of attorney lets the builder apply for approvals, run the site and sign on the project’s behalf. It does not make him the owner. Ownership stays with you until units are conveyed, and the agreement is what defines when and how that happens.
You are paid not in a price for the land, but in a share of what gets built on it — which is why the agreement is worth reading twice. The land is your entire contribution, and it is handed over first.
You receive a defined portion of what is built — specific units, identified in the agreement, ideally by floor and plan rather than by percentage alone.
You end up owning property. What it is worth depends on the market when it is finished, and on how well it was built. You carry that.
You receive an agreed percentage of what the project sells for. You end up with money rather than units, and you are exposed to the builder’s pricing and his willingness to sell.
It is simpler to compute and harder to police. If you take this route, the agreement has to define revenue precisely — gross or net, and net of what.
The two are often mixed, sometimes with a cash payment at signing. A cash component changes your tax position, which is covered below.
The ratio follows the value of the land set against the cost and the risk of building on it. Land is not the only contribution; capital, approvals, construction and the risk of unsold stock are the other side of it. Where the land is the larger part of what the finished project will be worth, the owner’s share is larger. Where it is not, it is smaller.
What moves the number, roughly in order of weight:
The single heaviest factor. An established address carries more of the finished value, and therefore more of the split.
Permissible ground coverage, height and setbacks decide how much saleable area exists at all. Two identical plots with different approvals are not identical plots.
A builder funding a higher specification is putting more in, and will ask for more back. Agree the specification, not just the ratio.
Clean, marketable title is worth money. A plot with a dispute, a mortgage or an unclear chain of ownership costs time to fix and is priced accordingly.
Under area share, unsold units are the owner’s problem too. Under revenue share, the builder controls the price at which your share is realised.
Money paid up front reduces the share that follows — and, as below, can affect how your capital gains are treated.
Before terms are discussed, the chain of ownership is traced and searched for charges. A serious builder will do this himself and will expect you to have your own advocate do it too. Anyone willing to skip it is telling you something.
The shape of the deal — structure, share, specification, timeline — agreed in principle before anyone spends money on drawings. This is the stage where the ratio is settled.
The joint development agreement is executed and registered with the sub-registrar, with stamp duty paid. Registration is not a formality; see below.
Executed alongside, giving the builder authority to act for the project. It should be limited to the development, and it should say what happens to it if the agreement fails.
Plans are drawn and submitted. The agreement should say who bears the cost of approvals and what happens if sanction is refused or delayed.
The builder funds and builds to the agreed specification. Milestones and a right of inspection belong in the agreement, not in conversation.
Issued when the building is certified complete. For an individual or HUF landowner this is also the date your tax is measured from — the next section is about why.
Your share is handed over and title to the units is conveyed. What you hold at the end should be the thing the agreement described at the start.
Under Section 45(5A) of the Income Tax Act, an individual or HUF landowner who holds the land as a capital asset and enters a registered joint development agreement is taxed on the capital gain in the year the completion certificate is issued — not in the year the agreement is signed.
That is the difference between a tax bill on a project that exists and a tax bill on a promise. It can be years apart, and you are not holding sale proceeds in the meantime with which to pay it.
The consideration is taken as the stamp duty value of the share you receive, measured on the completion certificate date, plus any cash received. Where cash is paid alongside the share, the builder deducts TDS at 10% under Section 194-IC.
The relief is conditional, and each condition is a way to lose it:
Registering the agreement is not paperwork. It is the condition on which the tax deferral rests.
Beyond the tax, an unregistered development agreement creates no enforceable interest in the land. If the relationship breaks down, what you are holding is weaker than you think it is. Banks will not lend against units built under one, which narrows the buyers for your own share and lowers what you can get for it.
Watch for the quieter version of the same problem: a registered agreement followed later by a supplementary agreement, unregistered, that changes the terms. The registered document is the one with force. Anything material belongs in it.
In Rajasthan, registration with the real estate regulator is mandatory where the land exceeds 500 square metres or the project has more than eight apartments. Below both thresholds it is not required.
This is worth understanding rather than half-knowing. A small villa project that is not RERA-registered is not cutting a corner; it is below the threshold the law sets. Equally, a larger project that should be registered and is not is a serious warning, and you can check the register yourself before you sign anything.
One point that catches landowners out: in a joint development the landowner can be treated as a co-promoter, which carries obligations towards buyers. If your project crosses the threshold, ask your advocate what that means for you specifically, because it is not only the builder’s exposure.
In Jaipur they mean two different things, and the confusion is common enough to be worth naming. JDA is the Jaipur Development Authority, the body that sanctions and approves. JDA is also the joint development agreement, the contract between you and the builder. Searching one will give you the other. When someone says “the JDA”, it is worth a second to establish which.
We partner selectively with landowners in established Jaipur neighbourhoods. You keep the land. We carry the design, the capital, the construction and the sale — from first line to final key.
We do not publish a ratio, and we would be suspicious of anyone who did. A number quoted before seeing the plot, the title and the sanctioned area is a guess, and a guess published in advance becomes a floor in every negotiation regardless of what the land is actually worth. What we will commit to is the process: the share is agreed, in writing, before a line is drawn.
We build a small number of houses and we finish them. The fairest thing to judge us on is not this page.
See Eden Aura — delivered and soldA conversation costs nothing and commits you to nothing. Bring the plot details and whatever papers you have; you will get a straight view of whether it is worth developing, including if the answer is no.
Discuss your land See the rest of Primeark
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This page is general information about how joint development agreements work in Rajasthan. It is not legal, tax or financial advice, it is not a substitute for advice on your own plot, and it may not reflect changes in law after publication. Have your own advocate examine the title and the agreement, and your own chartered accountant confirm your tax position, before you sign anything. Nothing on this page is an offer or an invitation to enter into a transaction.