The query is in regards to sale/ transfer of leasehold rights of properties in Saltlake city, Kolkata. As people dealing in it would be aware that the government of WB didn’t allow the transfer of leasehold rights allocated to the initial buyer up until recently. With this recent change, people who did hand over their property to their current occupier long time back are now applying for transfer of leasehold rights as per the process laid out. In this context my question is around a circumstance where the current leaseholder has handed over the property to the current occupier around 20 years for a certain sum of money (intent was to sale/transfer the leasehold rights of the property). With the recent change in the leasehold transfer guidelines, the current leaseholder is willing to help with the necessary application to transfer the leasehold right to the current occupier. Could you please understand what may be the tax implication for the current leaseholder considering the transaction of money took place 20 years back and necessary capital gains tax was paid?
Ask a question and receive multiple answers in one hour.
Lawyers are available now to answer your questions.
Kindly clarify whether payment was received by account payee cheques in 2002
2) if payment was received 20 years back on basis of unregistered agreement with the buyer then stamp duty valuation in 2002 would be sales consideration for computing the capital gains as the possession is obtained by the buyer during the agreement to lease and the sales consideration is paid through account payee cheques.
File a writ petition in HC for the same. It will give you relefs
Capital tax is applicable when a purchaser of property sells the property at enhanced price. Tax is calculated on difference between purchase price and selling price depending on tame lag between purchase and sell of property; either short term of long term. When a leasholder of property transfers the property by sell, the parameter of difference between purchasing price and selling price is not available. Therefore, such leasholder is not liable to pay any capital gain tax.
No tax implications as of now.
No new transaction now. All are fulfilling some formalities.
The property under leasehold cannot be sold by the lessee to the prospective purchaser until the property becomes a freehold property.
In that situation it can be again be treated as a transfer of leaseholding alone and not a sale transaction.
If there is no transaction of sale then there is no question of long terms capital gains tax.
However since some money had been transferred long ago and if your auditor is insisting on long term tax gains then the procedure to arrive at the capital gains has to be followed as per income tax act.
1. The earlier transaction was invalid in the eyes of law.
2. Permission for subleasing the salt lake property is being allowed since more than 10 years on payment of fees.
3. Presently the fee for subleasing or transferring the lease is Rs.5 lakhs per Cottah.
4. The current occupier shall have to register a Deed of Conveyance and the stamp duty will be as per current circle rate and the I.Tax amount will be levied as per the present price.
Dear Client,
The Income Tax Appellate Tribunal (ITAT), has held that the leasehold rights can not be computed as capital gains in respect of transactions in land or building under Section 50C of the Income Tax Act.
