Capital gain on receiving office by res. Home

Tax planning 120 views 3 replies
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Tax return planner
11 Points Joined February 2025

Hello 

I have residence house in building maharaj . 

My entire building went in redevelopment and i receive office .

I will receive corpus, alternate accommodation rent cheque etc 

Will it be taxable or exempt ?

And what is I but sine extra money to buy space 

Will same br taxable? 

Thanks :) 

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On 16 May 2025 at 12:46 Report
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Master in Accounts & high court Advocate
9004 Points Joined December 2011

The tax implications for the receipts and payments related to redevelopment of your residential house in the building are as follows:

Taxability of Receipts - 

*Corpus Amount*: The corpus amount received from the developer is generally considered a capital receipt and may not be taxable. However, it's essential to verify the purpose and nature of the corpus amount. - 

*Alternate Accommodation Rent*: The rent received for alternate accommodation during the redevelopment period might be taxable as "Income from Other Sources" under the Income-tax Act, 1961. - 

*Other Receipts*: Any other receipts, such as compensation for shifting or other benefits, might be taxable depending on their nature and purpose.

 Tax Implications of Additional Payment -

 *Additional Payment for Space*: If you pay extra money to buy additional space, it would be considered a capital expenditure. The tax implications would depend on the nature of the additional space and its usage. -

*Capital Gains*: If you sell the office space received in redevelopment, capital gains tax would apply. 

The cost of acquisition would be the cost of the original residential property, and the cost of improvement would include any additional amounts paid for the office space. Key Considerations - 

*Documentation*: Maintain proper documentation of all receipts, payments, and agreements related to the redevelopment to support your tax positions. - 

*Tax Planning*: Consider tax planning opportunities, such as investing in specified bonds or other assets, to minimize tax 

1 Reply
On 16 May 2025 at 15:09
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Tax return planner
11 Points Joined February 2025

Thank you sir 

.

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On 16 May 2025 at 20:11
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27918 Points Joined May 2017

Post details of development.

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On 16 May 2025 at 20:16


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