Capital gains

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Viral Jethalal Saliya (Querist)

04 March 2019 I am in possession of a land but dont have any ownership right , Now builder wants to redevelop that land and in settlement he agree to give me a Flat against this land which i have in my possession.
whether i have to pay any capital gains tax on the same or whether i can claim deduction U/s.54F of Income Tax act

Rajesh Kumar

Rajesh Kumar (Expert)

05 March 2019 Capital gain is levied on capital asset "held". Ownership of asset is not relevant. As you have possession of the asset, you are holding the asset and transfer of such holding right to the builder shall attract capital gain. If, investment is made in residential house, you shall be eligible for benefit under Section 54F of the Income Tax Act.

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Viral Jethalal Saliya

Viral Jethalal Saliya (Querist)

05 March 2019 Thanks Sir for the reply

But as i am going to get flat from builder against the land whether i can treat that home as purchase of house to claim deduction U/s.54F

Rajesh Kumar

Rajesh Kumar (Expert)

05 March 2019 It is purchase only. There are two transactions- sale of your rights in land resulting in capital gain; and use of that capital gain in purchase of residential property.

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Viral Jethalal Saliya

Viral Jethalal Saliya (Querist)

06 March 2019 Thanks Sir for the reply

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