| Question And Answer | |
|---|---|
| Subject: | Redevelopment agreement mentioning much lesser value of alternate accommodation |
| Category: | Income-Tax |
| Querist: | Swati |
| Answered by: | Law Intern |
| Tags: | cost of acquisition, FMV, redevelopment |
| Date: | March 16, 2026 |
Pagdi flat in which me and my husband were residing since before year 1984.
Redevelopment agreement made in year 2023 in which market value and stamp duty mentioned of alternate accommodation (which is the same address of the pagdi flat but reconstructed) after redevelopment was very less. Capital gain tax will be calculated on this amount in case the flat will be sold once we get the possession or as per fair market value of the flat at the time of redevelopment agreement?
As your pagdi tenancy rights were surrendered in exchange for the new ownership flat under the 2023 redevelopment agreement, it will be treated as a fresh acquisition of the new flat. The cost of acquisition of the new flat is its FMV on the date the tenancy rights were surrendered and the redevelopment agreement became effective.
You should obtain a valuation report from a registered valuer as on the 2023 date. Govt Stamp Duty Ready Reckoner rates from that period is also acceptable as evidence of the FMV.