| Question And Answer | |
|---|---|
| Subject: | tax applicable guidance required |
| Category: | Income-Tax |
| Querist: | D.K. UPADHAY |
| Answered by: | Law Intern |
| Tags: | Capital Gains, redevelopment |
| Date: | May 31, 2026 |
Dear sir ,
old 50 years rented property purchased @ Rs 5000 /= and paying rent Rs 100/= per month area 120 sqft –received from my father which has redeveloped in year 2015 with ownership bases new flats given to us . now after 10 years stay we wish to sold at Rs 50 lakhs . In redevelopment i have paid Rs 5.0 lakhs for parking space at ground level.
NOW WHAT WILL BE TAX ? As already i have one flat on ownership bases available .
any tax saving scheme is available ?
or
i can gift to my wife and then sale and buy new property on wife name is tax saving method is ok ? as any flat not on that name.
The redevelopment in 2015 has converted the tenancy into an ownership flat. This is treated as acquiring a new asset in exchange for surrendering tenancy rights. As you held the new flat for more than 24 months, it will be a LTCG.
The FMV of the tenancy rights + the amount paid for parking + stamp duty etc will be the cost of acquisition of the new flat.
As regards tax saving, you can claim s. 54 deduction if you invest the capital gains in a residential house.
Gifting to the wife will not attract tax. However, when she sells the flat, the gains will be clubbed with your income, neutralizing the tax advantage.