INCOME TAX ON REDEVELOPEMENT OF FLAT

This query is : Resolved 

Quick Summary
A flat owner sought tax treatment of rent and lump sum compensation received during redevelopment. The reply stated that compensation is tax-free to the extent actually used for alternate accommodation, with any excess taxable. Capital gains exemption under Section 54 is available on the redeveloped flat.

03 July 2026 Dear All,

I have a flat which is currently under redevelopement scheme. The flat is neither self occupied nor rented out.

I received monthly Rent of Rs. 10,000/- and lump sum amount of Rs. 2,00,000/- as a compensation from developer.

Please guide me whether rent and lump sum compensation received is taxable?

Please also guide me on applicability of capital gain & exemption under section 54 in such redevelopement case.

Thanks & Regards
Nirmal

03 July 2026 Rent and any other compensation are tax-free to the extent it is actually used. e.g. if rent paid is less then the received amount, the excess is taxable.
The redeveloped flat is exempted u/s. 54 based on old flat being handed over.

03 July 2026 Thank You Sir for your valuable reply.

04 July 2026 You are welcome.


You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now



Similar Resolved Queries


loading


Unanswered Queries



CCI Pro

Follow us
add to google news


Answer Query



Company
ARTICLESHIP 16 July 2026
CA Article

Pipara & Co. LLP.

Mumbai

CA Inter

View Details
Company
29 June 2026
Accountant (Finance & Compliance)

TRIEYEZ

Kolkata

CA

View Details
Company
23 July 2026
Semi qualified CA

Garg Bros & Associate CA

New Delhi

CA Inter

View Details
Company
23 July 2026
Senior Accountant

Felicity Adobe LLP

Bengaluru

CA Inter

View Details
Company
23 July 2026
CA Inter

Vikram Jadhav and Company

Pune

CA Inter

View Details
Company
14 July 2026
Senior Executive/ Manager

H S SHARMA AND CO

Pune

CA Final

View Details
Company
Featured 16 July 2026
CA Inter, CA Intermediate, CA IPCC, CA CPT, CA SemiQualified

Vakilsearch.com

Chennai

CA Inter

View Details
Company
ARTICLESHIP 30 June 2026
Taxation Content Writer Intern

Interactive Media Pvt Ltd.

New Delhi

CA Inter

View Details