Selling under constructed flat due to escalation in rates
Few years back we had booked flat with reputed builder with X rs per sq ft. We paid the money slab wise as and when required. When building was 50% constructed there was stay order imposed due to forest land issue. It was cleared by supreme court last year and building was given green signal for construction. Builder had called one to one meetings with investors and told us that due to all the inflation in material costs they will have to increase the booking rates to 2X rs/sq ft. To add to it they are asking the difference of amount even for the old construction. The construction was stopped for 10 years and we only have allotment papers with us and no agreement.
Builder is presurrising us to pay the previous amount + new slab cost or go for cancellation of flat for which he is willing to give booking amount with 9% interest for 10 years.
I know that going to court and settling it will take long time. If i choose option of accepting the amount I want to know the tax implication on the excess amount that I will receive.
P.S: I want to use that amount for personal needs and not invest.
Would like to seek your advice.