• Capital gain tax rules for redeveloped society flat

Ours is coop hsg. soc.situated in south mumbai.we have redeveloped the society on our own by giving private contract instead of appointing any builder under rule 33/7.Extra FSI was taken by existing soc members only by contributing the funds as per rate decided for per sq ft basis.the work started in 2008 & completed in 2015.possession given on
March 2015. 

The original area was 290 sq ft carpet and the present allotted flat is 670 sq ft carpet area. We have contributed for the extra amount in phases and instalments as was decided by the society.

     We have recd MHADA Final O.C. by June 2016 & BMC O. C.is in the pipeline and may get in 3-4 months.if I want to sell this property & want to invest in other property do it attract any capital gain tax. 
     we have been given to understand that one deal of Flat in the said building  has already happened by paying necessary stamp duty etc and the agreement is registered  with the stamp office & on the basis of the documents submitted by the buyer who has also taken a  
loan from a cooperative bank.
     pls note that we paid first advance in 2008 & in installments basis consequently.
     kindly guide about this.
Asked 1 year ago in Property Law from Mumbai, Maharashtra
Religion: Hindu
If you utilise the sale proceed of the immovable proeprty within next two years in another immovably then there is no question of Capital gain Tax.
So under this circumstances I do not find there is any such scope to impose such taz.
Devajyoti Barman
Advocate, Kolkata
12840 Answers
166 Consultations

5.0 on 5.0

1) you have surrendered your flat admeasuring 290 square feet and in exchange received flat of 670 square feet . You are liable to pay tax on such long-term gains at 20%.However, such capital gains are eligible for exemption under Section 54F of the IT Act as you have acquired a residential house after transfer of long-term capital asset

2)  As the property acquired by you is a capital asset acquired for claiming exemption under Section 54F, the lock-in period of three years is a binding condition for the property.

3) you are not allowed to sale the new house within three years of its acquisition

4) Otherwise, it will result in violation of conditions of Section 54F and the exemption allowed earlier will be withdrawn.

5) So, if you sell the new property in 2016, you will be liable to short-term capital gains tax, chargeable as per the IT slab rates applicable to you
Ajay Sethi
Advocate, Mumbai
45573 Answers
2677 Consultations

5.0 on 5.0

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