Can someone help/answer

We had a 500 sqyrd plot on which we had a two storeyed house - ground floor occupied by us and top floor rented. We gave this plot for redevelopment and the agreement is as follows;

1. we have received a small fee as sign up

2. of the flats constructed, about 4 flats were given to us

We have not sold any of the flats and are occupying one. The remaining three will be gifted to children. currently rented.

Are we liable for capital gains tax? If yes, how do we compute this? What the dates that are applicable for computation of value of property of the old house and the new flats? How does the value of the new flat be arrived at - who is the final authority? Is it better to gift the flats to children and then pay capital gains tax if any?Please help

Originally posted by :John
"	We had a 500 sqyrd plot on which we had a two storeyed house - ground floor occupied by us and top floor rented. We gave this plot for redevelopment and the agreement is as follows; 1. we have received a small fee as sign up 2. of the flats constructed, about 4 flats were given to us We have not sold any of the flats and are occupying one. The remaining three will be gifted to children. currently rented. Are we liable for capital gains tax? If yes, how do we compute this? What the dates that are applicable for computation of value of property of the old house and the new flats? How does the value of the new flat be arrived at - who is the final authority? Is it better to gift the flats to children and then pay capital gains tax if any?Please help	"

Previously you are the only owner of the House. Now you have become a co- owner of the house.

SO as per income tax act you have got 4 flats by redeveloping the existing one. So it is eligible for Capial Gains.

But you are eligible for exemption under sec 54. So i dont think you have to pay tax.

Its depends upon the market value of the plot you occupied. If you gift the house to your children then there will be no tax implication now. But future at the time of sale some implications viz indexation will be different