Capital gains on transfer of property under landlord system

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This query is : Resolved

Sagar Shah (Querist)

29 April 2013 Dear experts,

Can you please help me with the tax implications in the below transaction:

The Case:
Mr. A owns tenancy rights in respect of an immovable property since past 20 years (AY 1994-95). He acquires the ownership rights of the same property in AY 2013-14. He further wishes to transfer / sell the property in AY 2014-15.

The Query:
The query is that will the asset be a long term capital assset or the short term capital asset? Will the period of holding of tenancy rights be clubbed so as to determine its nature as to long term or short term. If the asset is classified as a long term capital asset, will the benefit of indexation be available from AY 1994-95 or AY 2014-15.

Please help me with the above.

Thanks and regards,
Sagar

VISHRUT

VISHRUT (Expert)

29 April 2013 The assets will be a short term capital assets as though possession was there since last 20 years its ownership was established 1 year ago only.

Period of holding of tenancy right can not be clubbed and hence no benefit of indexation can be available.

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