Long Term Capital Gain on appreciation of Value of Property

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This discussion concerns the Capital Gains Tax (CGT) liability when an old bungalow was exchanged for a share of a developed property. The tax is generally payable in the year the completion certificate is issued, as per Section 45(5A). However, the individual is facing issues as the developed property is currently unsaleable due to notices regarding its illegality.

Siddharth Kishan Mane

Siddharth Kishan Mane (Querist)
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11 April 2024 I had old Bunglow which was given to a Developer for development for no money consideration. The term was that the Builder should give me 45% of the Developed property for my own use both residential and commercial. What is the Tax liability under LTCG?
The old property was purchased in 1978 and development Agreement is in Jan 2018.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 April 2024 The gains you make by receiving developed property in exchange of land is known as capital gains. As per the provisions of Section 45(5A), you will have to pay tax on these capital gains in the year in which the certificate of completion is issued for the whole or part of the property.

Siddharth Kishan Mane

Siddharth Kishan Mane (Querist)
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12 April 2024 As the Developed property received from the Developer is unable to sale due to certain authorities have issued notices about illegality of the Developed property hence it is lying as it is. Kindly advice, Thnx & Regards

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 April 2024 Check completion certificate issued or not.

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