| Question And Answer | |
|---|---|
| Subject: | Capital Gain on Redevelopment of an Apartment to Commercial Office Building |
| Category: | Income-Tax |
| Querist: | Gauri |
| Answered by: | Law Intern |
| Tags: | Capital Gains, redevelopment, section 54 deduction, Section 54EC deduction, Section 54F deduction |
| Date: | July 22, 2025 |
Housing Flat Building went for redevelopment in 2022. Now against this redevelopment Commercial Office space is received in 2025 as per the redevelopment agreement.
Will it taxed as capital gain as new residential unit is not received against the old flat.
Yes. The surrender of a residential flat to a developer under a redevelopment agreement is a “transfer” under Section 2(47) of the Income Tax Act. Under Section 45(5A), the gain is assessable in the year the certificate of completion is issued for the redeveloped property.
Exemptions u/s 54 and 54F will not be available. Section 54EC can be claimed.
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