| Question And Answer | |
|---|---|
| Subject: | tax liabilty on conversion of tenancy right to ownership due to re-development |
| Category: | Income-Tax |
| Querist: | nakul |
| Answered by: | Mr .Ganesh Purohit |
| Tags: | redevelopment, tax liability, Tenancy right |
| Date: | September 28, 2024 |
i hold tenancy rights to a commercial premise
the tenancy is in the name of my partnership firm
the entire building is going for re-development due to notice issued by MHADA under clause/rule 79
will my firm be liable to any tax due to conversion of tenancy to ownership of the property ?
In this case the surrender of tenancy rights of commercial premises are subject to capital gain, the receipt of immoveable property in lieu of tenancy right will be the consideration for such surrender. The assessee cannot claim any exemption from capital gains in such cases as what is received is commercial asset, however if the residential house is received than section 54F may be applied if it is long term capital gain.
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