Capital gains sundeep
This query is : Resolved
10 June 2024
I shown full amount of LTCG in fy2012-13,though I received rs.10 lac less due to some condition in the agreement. But A.O. asked to declare full amount and deposited in NHAI for 3 years then. those ten lacs I am due to receive now .should it be redeclared ? if yes how? what about tax on it.?
10 June 2024
if no then how to show in ITR
11 June 2024
no response on my query from anyone?
13 June 2024
No, consider it as old dues received.
13 June 2024
so no need to mention anywhere in ITR ?
As my mother passed away two years before, I will receive around 3.5 Lacs as my mothers 1/3rd share along with above said my share. how to mention in ITR? will it attract any Tax?
Further developer wants to compensate for 12 years delay in form of hardship compensation. does this amount attract any tax? if yes how to go about it in another way, safe way to attract no tax or minimum tax? This is a reconstruction of old buildings project in MHADA , Mumbai.
As my mother passed away two years before, I will receive around 3.5 Lacs as my mothers 1/3rd share along with above said my share. how to mention in ITR? will it attract any Tax?
Further developer wants to compensate for 12 years delay in form of hardship compensation. does this amount attract any tax? if yes how to go about it in another way, safe way to attract no tax or minimum tax? This is a reconstruction of old buildings project in MHADA , Mumbai.
13 June 2024
No tax on receipt of both share of money.
No need to show it in ITR.
Adjust hardship compensation against building cost no need to pay any tax.
No need to show it in ITR.
Adjust hardship compensation against building cost no need to pay any tax.
13 June 2024
Sir, Thanks for the Advice. could not follow your last line, kindly Please elaborate .( I am not spending for the building cost.The redeveloper spends.)
13 June 2024
In such a case the compensation is normally paid by the builder on account of hardship faced by owner of the flat due to displacement of the occupants of the flat. The said payment is in the nature of hardship allowance / rehabilitation allowance and is not liable to tax
14 June 2024
("The original agreement was done in 2012 for the said property . Part of money Rs.10,31,250/- was with held as per terms of the agreement. There was a lapse/default of 12 years in commencement of the project by developer. Thus there is a delay in paying the said Rs.10,31,250/- to the beneficiary. The property capital value has gone up in the subsequent twelve years till date. The difference in value of property amounting to Rs.55 lacs is payable now to the beneficiary Mr.XXXXXXX.")
I have drafted the above clause to include in the MOU to be done in few days. the clause is drafted by me so that the monies 55 lacs coming to me can be put under section 54EC of capital gains. please confirm that this clause will get me that CG benefit. Other point I want to ask you Sir, is whether I can avail Capital Gains again now. I availed it in 2012-13 before. suggest any modifications for above clause which you may deem fit.
I have drafted the above clause to include in the MOU to be done in few days. the clause is drafted by me so that the monies 55 lacs coming to me can be put under section 54EC of capital gains. please confirm that this clause will get me that CG benefit. Other point I want to ask you Sir, is whether I can avail Capital Gains again now. I availed it in 2012-13 before. suggest any modifications for above clause which you may deem fit.
14 June 2024
Sir, Please reply. you are my last resort.
14 June 2024
Yes, you can avail capital gains now in view of enhanced payment received now.
You can put it under 54EC.
You can put it under 54EC.
18 June 2024
I understand I cannot take advantage of sec 54EE again now. i had availed it in 2012-13 for same property .Am I right?. what are the alternatives to save huge 30% tax in above case.
18 June 2024
Long term capital gains only 20% tax payable, pay it.
19 June 2024
you reply is out of context. when i doubtful whether i can avail LTCG. how can i pay tax 20% on this section.
19 June 2024
you reply is out of context. when i doubtful whether i can avail LTCG. how can i pay tax 20% on this section.
13 August 2025
You've shared a complex and long-standing situation involving:
LTCG reported in FY 2012-13
Deferred payment of ₹10.31 lakhs from that transaction
Additional ₹55 lakhs being paid now (in 2025) as compensation for delay
1/3rd share of ₹3.5 lakhs from your late mother’s share
Possible hardship compensation
Your wish to claim LTCG exemption under Section 54EC now
Let’s break it down and answer clearly:
✅ 1. ₹10.31 Lakhs Withheld in 2012-13 — Received Now
Since this amount was part of original sale consideration, and you already declared full LTCG back in FY 2012-13 and even deposited in 54EC bonds, this ₹10.31 lakh should not be taxed again.
✅ No need to show this in ITR again
✅ This is a realization of earlier reported income
✅ Keep documentation to explain it if ITD questions later
✅ 2. ₹3.5 Lakhs – Your Share from Mother's Share
If this is inheritance (from your mother's share of flat), it's not taxable under Section 56(2)(x)
✅ No need to show it in income section of ITR
✅ Can show it under Schedule EI (Exempt Income) in ITR, as a precautionary disclosure
✅ 3. ₹55 Lakhs Compensation – Can You Claim Capital Gain Exemption Again?
This is the most important part of your question.
❓ Is this ₹55L Capital Gain or something else?
If the developer pays ₹55L as compensation for increase in property value, it could legally be treated as additional consideration for sale under Section 2(47) and Section 45, and hence subject to Capital Gains Tax.
On that basis, yes, you can again claim LTCG exemption under Section 54EC, if you invest in NHAI/REC bonds within 6 months of receiving it.
✅ But note: The IT Department may scrutinize this, since you had already claimed 54EC once. You will need to show the MOU clearly states this ₹55L as part of revised sale consideration, due to breach of agreement or delayed possession.
🚫 You cannot claim 54EC exemption again on the same LTCG that was already exempted in 2012-13.
But here, if this ₹55L is due to a fresh right extinguishment or compensation, and not part of the original LTCG, you can treat this as new LTCG and claim exemption.
🔁 Suggested Modified Clause in MOU
Instead of saying:
"difference in value of property amounting to Rs.55 lacs is payable now to the beneficiary..."
Say something like:
"In view of inordinate delay of over 12 years in the execution and delivery of possession under the Development Agreement dated [Date], the developer has agreed to compensate the beneficiary with an additional consideration of ₹55,00,000. This amount is agreed as a settlement for extinguishment of rights arising from the said agreement, and shall form part of total consideration for capital gains purposes."
This strengthens your case that it is capital in nature.
✅ 4. Hardship Compensation – Taxable or Not?
If the developer pays a separate amount as hardship compensation, courts have sometimes held it as:
Non-taxable if it’s for distress, inconvenience (especially for MHADA reconstructions)
But if the compensation is linked to delay or additional rights extinguished, it may be considered as capital receipt or income depending on structure.
🔹 Best way: Have the clause structured to state it's for personal hardship, rehabilitation inconvenience, and not in lieu of sale or transfer, so it may be considered non-taxable.
❌ Can You Claim 54EC Again?
Yes, but only on new LTCG, not on the LTCG already claimed in 2012-13.
So, if ₹55L is treated as new additional consideration, and taxed as fresh LTCG, then 54EC exemption can be availed again.
LTCG reported in FY 2012-13
Deferred payment of ₹10.31 lakhs from that transaction
Additional ₹55 lakhs being paid now (in 2025) as compensation for delay
1/3rd share of ₹3.5 lakhs from your late mother’s share
Possible hardship compensation
Your wish to claim LTCG exemption under Section 54EC now
Let’s break it down and answer clearly:
✅ 1. ₹10.31 Lakhs Withheld in 2012-13 — Received Now
Since this amount was part of original sale consideration, and you already declared full LTCG back in FY 2012-13 and even deposited in 54EC bonds, this ₹10.31 lakh should not be taxed again.
✅ No need to show this in ITR again
✅ This is a realization of earlier reported income
✅ Keep documentation to explain it if ITD questions later
✅ 2. ₹3.5 Lakhs – Your Share from Mother's Share
If this is inheritance (from your mother's share of flat), it's not taxable under Section 56(2)(x)
✅ No need to show it in income section of ITR
✅ Can show it under Schedule EI (Exempt Income) in ITR, as a precautionary disclosure
✅ 3. ₹55 Lakhs Compensation – Can You Claim Capital Gain Exemption Again?
This is the most important part of your question.
❓ Is this ₹55L Capital Gain or something else?
If the developer pays ₹55L as compensation for increase in property value, it could legally be treated as additional consideration for sale under Section 2(47) and Section 45, and hence subject to Capital Gains Tax.
On that basis, yes, you can again claim LTCG exemption under Section 54EC, if you invest in NHAI/REC bonds within 6 months of receiving it.
✅ But note: The IT Department may scrutinize this, since you had already claimed 54EC once. You will need to show the MOU clearly states this ₹55L as part of revised sale consideration, due to breach of agreement or delayed possession.
🚫 You cannot claim 54EC exemption again on the same LTCG that was already exempted in 2012-13.
But here, if this ₹55L is due to a fresh right extinguishment or compensation, and not part of the original LTCG, you can treat this as new LTCG and claim exemption.
🔁 Suggested Modified Clause in MOU
Instead of saying:
"difference in value of property amounting to Rs.55 lacs is payable now to the beneficiary..."
Say something like:
"In view of inordinate delay of over 12 years in the execution and delivery of possession under the Development Agreement dated [Date], the developer has agreed to compensate the beneficiary with an additional consideration of ₹55,00,000. This amount is agreed as a settlement for extinguishment of rights arising from the said agreement, and shall form part of total consideration for capital gains purposes."
This strengthens your case that it is capital in nature.
✅ 4. Hardship Compensation – Taxable or Not?
If the developer pays a separate amount as hardship compensation, courts have sometimes held it as:
Non-taxable if it’s for distress, inconvenience (especially for MHADA reconstructions)
But if the compensation is linked to delay or additional rights extinguished, it may be considered as capital receipt or income depending on structure.
🔹 Best way: Have the clause structured to state it's for personal hardship, rehabilitation inconvenience, and not in lieu of sale or transfer, so it may be considered non-taxable.
❌ Can You Claim 54EC Again?
Yes, but only on new LTCG, not on the LTCG already claimed in 2012-13.
So, if ₹55L is treated as new additional consideration, and taxed as fresh LTCG, then 54EC exemption can be availed again.
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