Question And Answer
Subject: Capital Gain
Querist: Alpesh Modi
Answered by:
Tags: ,
Date: February 19, 2022
Query asked by Alpesh Modi

Residential Flat in Mumbai
Flat Purchased on 13.10.2015

Total cost of Acquisition including stamp duty and other charges Rs.45 Lakhs
Society gone for Redevelopment

Development Agreement Registered  between society and Developer on 01.07.2015
Permanent Alternate Accommodation Agreement (PAAA) Between Flat Owner and Developer registered on 05.05.2017

Value of the flat as per Stamp duty Authority as on 05.05.2017 RS.21 Lakhs
Full Occupancy certificate received on 14.08.2020
Sold on 10.08.2021
Sales Consideration RS.85 Lakhs


Taxation of Capital gain in which Year and also Whether it is short term or Long considering
Section 45(5A) effective from AY 2018-2019

Transfer U/s.2(47)(v) section 45 of IT Act and Section 53A of TOPA and also whether any benefit of section 54 available.

Kindly share your valuable Opinion

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Section 45(5A) of the Income-tax Act, 1961 was introduced vide Finance Act, 2017. According to the Memorandum explaining the provisions of the Finance Bill, 2017, these provisions were introduced to minimize the hardship faced by Land Owners when they enter into a Joint Development Agreement with a Developer, so that the transfer of land to the Developer doesn’t attract Capital Gains, thus postponing the taxable event to the completion of the project.

Therefore, the said provisions cannot be made applicable to an assessee who is a unit holder in the housing society.

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