Parth Shah
Quick Summary
In Real E-State sector Transfer TDR is prominent method for utilizing the potential. Where in Holder of TDR transfer the TDR generated from waving the right, surrendering the eligible area to the requisite Developer for Construction. However, It is been noted that Assessing officer while assessing t
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FAQ :
Generally, the transfer of TDR is not considered a transfer of a capital asset as defined by Section 50C, which typically refers to land or buildings. TDR is often viewed as a right generated by the plot itself.
Based on several ITAT and court judgments, the sale of TDR is often not liable for capital gains tax because there is no cost of acquisition for these rights.
Section 50C deals with the transfer of capital assets, specifically land or building, where the consideration received is less than the stamp duty value. It deems the stamp duty value as the full consideration for capital gains calculation.
Yes, there are several judgments from ITAT and High Courts, such as the Bombay High Court in CIT vs. Sambhaji Nagar Co-op. Hsg. Society Ltd., that have held TDR sales are not subject to capital gains tax due to the lack of acquisition cost.
The primary reason is that TDRs are generated by plot development rules and do not have a quantifiable cost of acquisition, which is a necessary component for calculating capital gains under Section 45.
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