Section 50C and 50D

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This discussion examines the applicability of Sections 50C and 50D of the Income Tax Act to a property transaction. In this scenario, a landowner (A) transfers 52.5% ownership to a protected tenant (B) for free. In return, B relinquishes tenancy rights over the remaining 47.5%. The consensus is that these sections do apply, and the transaction is subject to capital gains tax, specifically in the hands of B, who is transferring their tenancy rights.

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(Querist)
16 January 2020 A is the owner of a land.
B is a protected Tenant in the land.
A is giving B on ownership basis and free of cost 52.5% share of the land. In lieu of the same B is surrendering his tenancy rights to A with respect to the Balance 47.5% of the land.
Are sections 50C and 50D of the IT Act applicable to A in the above transaction.
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Amol S Joglekar

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Amol S Joglekar (Expert)
16 January 2020 yes. It is subject to Capital gains.
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HIMANSHU

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HIMANSHU (Querist)
16 January 2020 Sir, In the hands of whom A or B?
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Amol S Joglekar

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Amol S Joglekar (Expert)
16 January 2020 B is transferring his/her tenancy rights. Right? So capital gain is taxable in the hands of transferor i.e. B
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