| Question And Answer | |
|---|---|
| Subject: | redevelopment taxation |
| Category: | Income-Tax |
| Querist: | premang goradia |
| Answered by: | Research Team |
| Tags: | Re development, redevelopment, taxation |
| Date: | October 13, 2023 |
- My Mother had a Flat (460 sq,ft) on Ownership basis since 1984.
- Building went into Redevelopment in the Year 2014.
- Builder paid Stamp Duty only on Construction Cost Rs 1760/ sq.ft.(as the Law Prevailed in 2014), whereas Fair Market Value & Stamp Duty Value was 8600/ sq.ft
- Now which Value I Have to Take for Capital Gain Tax Calculations
- I have sold the Flat in August 2023.
- from 2001 as base rate or stamp duty paid value or market value as on 2014 (agreement yr)
One has to study the development agreement to understand the issue of taxation. If the flat was sold within two years of getting possession of the new flat , it will be short term capital gain . The assessee will be entitle to get the market value of the flat as cost on getting the new flat from the builder . The assessee will be entitle to get indexation on exchange of old flat to new flat given by the Builder . There will be two transfer . One on getting the possession of flat from the Builder another on sale of the flat to third party after getting the possession of the flat . It is desirable to consult the tax consultant , who can advice after studying the development agreement .
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