Capital gain or not ? - urgent

This query is : Resolved

Nihal Joshi (Querist)
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02 July 2015 Dear Sir,

One of our client is residing in co-op housing society. Now that society is going for re-development. Each members will get more area than the current area. Our client is the owner of 2 flats (Total area of 2 flats = 1,000 sq. feet). In the new society he is going to only get 1 flat (Total area = 1,600 sq. feet.

My question is whether our client will be taxed for capital gain or any other tax or not?

The society also liable to pay any tax?

Thanks and Regards,
Nihal Joshi.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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02 July 2015 No capital gain tax applicable as any capital gain will be exempted u/s 54 on this arrangement.

Nihal Joshi

Nihal Joshi (Querist)
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02 July 2015 sir so can i say that "amount received by members were in effect for granting the developer the right to load TDR on the plot of society, which right came into existence only under the Development Control Rules, 1993 and which right therefore had no cost of acquisition. And in the absence of cost of acquisition capital gain can not be computed"

Please confirm

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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02 July 2015 In the absence of cost of acquisition it has to be taken as zero.

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