Taxability on Redevelopment of Society
Harsh Vardhan Dawar
(Querist) 17 March 2011
This query is : Open
X was owner of a 795 sq feet flat, purchased in 1979.
The society entered into a redevelopment agreement with a builder in January, 2011.
Based on the FSI rules, X was entitled to a 970 sq feet house in the new building.
However, in the new building X has taken a new flat of 856 sq feet and he has been paid Rs. 10 lakhs for surrendering 114 sq feet to the builder.
This lump sum amount of Rs. 10 lakhs will be received by X in parts over a period of the next 2 years till January 2013 when he will get possession of the new flat.
Till the building is ready, X receives Rs. 30,000 per month while his monthly rent expense is Rs. 25,000 per month.
Questions:
(1) What is the taxability of the transfer of the old flat in exchange for the new flat? How to calculate the Capital gains, if any?
(2) What is the taxability of the lump sum received on surrender of 114 sq feet? How to calculate the Capital gains, if any?
(3) What is the taxability of the monthly rent received or the savings of Rs. 5,000 per month?
