CAPITAL GAIN REDEVELOPED FLAT

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This discussion explores the capital gains tax implications for a flat purchased in 1993 that underwent redevelopment. Possession was handed over in 2021, with the new flat received in 2025. The key question is whether this qualifies as a taxable long-term capital gain, especially given the extended construction period. The consensus is that the date of acquisition for redevelopment is considered from the original purchase date (2001), making the gain long-term. It also queries the availability of exemption under Section 54.

ESMAIL SITABKHAN

ESMAIL SITABKHAN (Querist)
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31 July 2026 Assessee purchased flat in1993 the building went into redevelopment process . Assesee vacated the flat and handed over the possession the year 2021. Builder in year 2025 gave the possession of fully constructed flat. whether this transaction will be treated as taxable long term capital gain since the construction completed after 4 years.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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31 July 2026 DOA of redevelopment of flat is considered from the date of purchase of original asset, which in this case is considered from 2001. Hence the gain will be LTCG.

ESMAIL SITABKHAN

ESMAIL SITABKHAN (Querist)
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31 July 2026 YES. I AM ASKING EXEMPTION U/S 54 WILL BE AVAILABLE AS CONSTRUCTION PERIOD TOOK 4 YEARS

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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31 July 2026 Courts have granted the exemption in cases where the situations were beyond the control of the assessee.

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