| Question And Answer | |
|---|---|
| Subject: | Cessed Property tax implications on flat surrendering |
| Category: | Allied Law, Income-Tax |
| Querist: | Amit Shah |
| Answered by: | Research Team |
| Tags: | Capital Gains, Cess, surrender, Tenancy |
| Date: | March 2, 2024 |
I am a tenant in a cessed building in Matunga East – Mumbai. If I surrender my tenancy & get a payment from the landlord – is that subject to taxes? If yes – what would be the tax %? What would be the implication if I invest the money in a residential property? Will i get exempted from taxes on account of the same?
Amount received on surrender of the tenancy rights is liable to capital gains tax as the cost of tenancy is considered as nil. It will be taxable as long term capital gains . If the amount is invested in a residential property the assessee will get the benefit under section 54F of the Act , subject to other conditions. One has to study the agreement to guide properly the tax implications . It may be desirable to show the agreement to the tax consultant , who can study the agreement and can advice properly .