Redevelopment of Propertry

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This discussion clarifies capital gains tax on redeveloped properties purchased in 1990. The key takeaway is that capital gains tax is only payable when the redeveloped property is eventually sold, not upon receiving the Occupancy Certificate (OC) in 2024. The cost of acquisition for calculating the gain will be indexed from the purchase year (2001) up to the year of sale.

Dimpy

Dimpy (Querist)
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07 April 2022 Hello

Property purchased in 1990
Went under redevelopment in Jan 2022
Assuming we will receive the OC in 2024

Case no. 1- In the year 2021-22 – No capital gain tax
Case no. 2 - In the year 2024-25 – again no capital gain tax as redeveloped property is received within 3 years.
Case no. 3 - So now only capital gain will be taxable in the year in which the redeveloped property is sold.
In case no. 3- Cost of Acquisition will be indexed cost of purchase taking base year as 2001 till 2022.

Am I right?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 April 2022 Yes, you are right, indexation done upto the year of sale.
No time limit for redevelopment of property.

Pooja Yagnik

Pooja Yagnik (Expert)
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08 April 2022 Are you considering Getting new flat against old flat as sale of Capital Goods? Or are your selling the same property once it's developed?

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