Capital gains on goodwill money for property development
This query is : Resolved
P V VAITHYANATHAN
(Querist)
11 February 2015
I am 70 years old and residing in Chennai. I had an old flat originally purchased by me from Housing Board in 1980.
Recently the owners of our flat decided to go in for a joint development of our property with a contractor. Each flat owner has now received a lumpsum as goodwill money from the contractor, in addition to a new flat at the same premises where the old property stood.
Please let me know whether this goodwill money is taxable in any way. If so, how the tax would be assessed and how to avoid or minimise the same?
Appreciate your valuable advices. Thanks.
Recently the owners of our flat decided to go in for a joint development of our property with a contractor. Each flat owner has now received a lumpsum as goodwill money from the contractor, in addition to a new flat at the same premises where the old property stood.
Please let me know whether this goodwill money is taxable in any way. If so, how the tax would be assessed and how to avoid or minimise the same?
Appreciate your valuable advices. Thanks.
Amol S Joglekar
(Expert)
11 February 2015
This money is taxable under capital gain. You can invest the same in 54EC investments so as avail the benefits of capital gain exemption.
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