Is my property subject to capital gains tax ?
ksr prasad
(Querist) 10 April 2014
This query is : Resolved
I, along with 3 more partners have entered into an agreement with a builder for development of a multi-floor residential building on our plots at Hyderabad in a panchayat layout. The agreement was signed last year and as per the agreement, each of us will get 2 flats to be handed over in the next 6 months time. There is no cash or cheque transaction between us. Are we liable for any capital gains tax or any other tax for the 2 flats we are going to own. We have no intention to sell them. Kindly clarify.
Anirudh
(Expert) 10 April 2014
You have not indicated (1) whether only 8 flats would be constructed (2) how the developer is being compensated for the construction done for you by him.
Without the above information, it will not be possible to answer your query.
Dr J C Vashista
(Expert) 11 April 2014
Contact tax consultant/CA, it is not a legal query.
malipeddi jaggarao
(Expert) 11 April 2014
If you do not receive cash as compensation and you do not intend to sell the flats given by the builder, according to me no Capital Gains Tax.
ajay sethi
(Expert) 11 April 2014
answer queries raised by mr anirudh
ksr prasad
(Querist) 13 April 2014
We have agreed for a sharing of 45% and 55%. Ours 45% and builder's 55%. Now kindly clarify.
Anirudh
(Expert) 13 April 2014
The capital gains will get triggered not on the two flats that you get, but on the 55% of the undivided land which you are parting with.
More over, the capital gains tax will get attracted in the year in which you handed over possession to the builder/developer.
C. SANJEEVA RAO
(Expert) 14 April 2014
Yes, capital gains shall be attracted as per the provisions of the Income-tax Act,1961 even you don't receive the consideration in cash. For better appreciation and advice, consult the Tax Consultant of your place with full information.
T. Kalaiselvan, Advocate
(Expert) 12 April 2014
