Tax on corpus fund

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This query is : Resolved

Rahul Lakhani (Querist)

10 July 2017 Hello, I am a tenant surrendering my tenancy rights to a developer in Mumbai and in lieu of the same I am receiving Permanent Alternate Accommodation (residential) in the same area. I would like to know if there will be any capital gains tax on the same. Also the builder is paying me compensation (Corpus Fund). Will I be liable to pay taxes on the corpus fund? Thanks in advance.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

10 July 2017 There will be no capital gains tax on the Permanent Alternate Accommodation and long term capital gains tax at 20% applicable on the corpus fund.
Tax can be avoided if corpus fund is deposited in 54EA bonds for 3 years.

Rahul Lakhani

Rahul Lakhani (Querist)

10 July 2017 Thank you for your reply Mr. Seetharaman. Isn't the Section 54(F) allow me to get no capital gain tax on the Permanent Alternate Accommodation?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

10 July 2017 See my modified reply. No capital gain tax on the Permanent Alternate Accommodation

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