Tax Inplication under the head house property & capital gain

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Nikunj Mahesh Raimangia (Querist)
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21 March 2008 Dear All,

One of our client owns a residential house of 500 sq. ft. at mumbai.
A year ago the house was demolised by the builder in the scheme of reconstruction. & it was aggried at that time that he will given compensation as follows.
1. New house at same place of 700 sq. ft.
2. Rs. 2,00,000/- cash compensation.
3. Builder will pay amount of Rent of the house taken by the client for residing during the reconstruction period.

What will be the tax implication on the above matter under heads house property & capital gain ?
please reply.
thanks in advance.

pushpendra

pushpendra (Expert)
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21 March 2008 under the capital Gain

Sale considetation will be RS. 2,00,000 + M.V. of New House of 700 sq. ft. and then calculate the C.G. as per Income Tax provision

Under the House Property.

Rent of Other house will be treated the income under the house property.

CA. GOPAL SONIKA

CA. GOPAL SONIKA (Expert)
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22 March 2008 Capital Gain tax arises only from the transfer or sale of capital asset. However, 'transfer', in relation to a capital asset, includes the sale, exchange or relinquishment of the asset or the extinguishment of any rights therein or the compulsory acquisition thereof under any law ". As such the it cannot be charged under the head Capital Gains.
Regarding Rent, could u be more clear to the third point.

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