{"id":56317,"date":"2025-08-24T15:46:46","date_gmt":"2025-08-24T10:16:46","guid":{"rendered":"https:\/\/itatonline.org\/digest\/?post_type=qa&#038;p=56317"},"modified":"2025-08-24T15:46:46","modified_gmt":"2025-08-24T10:16:46","slug":"capital-gains-on-redeveloped-property","status":"publish","type":"qa","link":"https:\/\/itatonline.org\/digest\/qa\/capital-gains-on-redeveloped-property\/","title":{"rendered":"Capital Gains on redeveloped property"},"content":{"rendered":"<p><strong>Capital gains exemption u\/s 54 issue<\/strong><\/p>\n<p><strong>Facts of the case<\/strong><\/p>\n<ul>\n<li>Purchase price (resale property) of property \u2013 25 Lacs<\/li>\n<li>Year of purchase \u2013 Jan 2010<\/li>\n<li>Stamp duty \/ registration \u2013 1.1 Lacs<\/li>\n<li>Other cost of acquisition (brokerage \/ civil interiors etc) \u2013 1.4 lacs<\/li>\n<\/ul>\n<p><strong>Approx Cost of acquisition: 27.5 lacs (448 sq ft)<\/strong><\/p>\n<p><strong>\u00a0<\/strong><strong>Redevelopment undertaken in FY 21-22<\/strong><\/p>\n<ul>\n<li>PAAA signed and stamp duty \/ registration paid for addl area \u2013 <strong>Feb, 2022<\/strong><\/li>\n<li>Additional area allotted \u2013 95 sq ft<\/li>\n<li>Additional area purchased \u2013 75 sq ft @ 16,000\/sqft registration value \u2013 13.4 Lacs (incl GST, stamp duty &amp; registration)<\/li>\n<li>Possession received in <strong>Sept 15, 2024<\/strong><\/li>\n<\/ul>\n<p><strong>Total area (448+95+75) = 618 (possession recd in October, 24)<\/strong><\/p>\n<p>&nbsp;<\/p>\n<table>\n<tbody>\n<tr>\n<td width=\"564\"><strong>Details<\/strong><\/td>\n<td width=\"206\"><strong>Amount (approx)<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"564\">ICA for property acquired in Jan 2010 (448 sq ft, details above) (376\/148)<\/td>\n<td width=\"206\">70.0 lacs<\/td>\n<\/tr>\n<tr>\n<td width=\"564\">Additional area allotted (95 sq ft)<\/td>\n<td width=\"206\">&#8211;<\/td>\n<\/tr>\n<tr>\n<td width=\"564\">Additional area purchased (75 sq ft)<\/td>\n<td width=\"206\">13.4 lacs<\/td>\n<\/tr>\n<tr>\n<td width=\"564\">Cost of redeveloped prop<\/td>\n<td width=\"206\">83.4 lacs<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><strong>Questions<\/strong><\/p>\n<ul>\n<li><strong>What is the ICA of redeveloped prop and would it tantamount to LTCG if I sell the prop in FY26?<\/strong><\/li>\n<li>Will the entire proceeds be exempt u\/s 54 if the CG is reinvested in a new property worth, say, 1.8cr? <strong>If not, what is the min holding period of the redeveloped property for it to become eligible for exemption u\/s 54? i.e. no LTCG \/ STCG payable.<\/strong><\/li>\n<li>Should I disclose anything in ITR for AY25-26? The new property is unsold till date.<\/li>\n<\/ul>\n","protected":false},"comment_status":"open","ping_status":"closed","template":"","qa_expert":[1275],"qa_category":[23],"qa_tag":[24,437],"class_list":["post-56317","qa","type-qa","status-publish","hentry","qa_expert-law-intern","qa_category-income-tax","qa_tag-capital-gains","qa_tag-indexation"],"acf":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa\/56317","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/qa"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=56317"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=56317"}],"wp:term":[{"taxonomy":"qa_expert","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa_expert?post=56317"},{"taxonomy":"qa_category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa_category?post=56317"},{"taxonomy":"qa_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa_tag?post=56317"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}