Hi, Following are the facts related to my query: 1) Mr. A was staying in a house property in capacity of a tenant. 2) The owner of property went for redevelopment of the said property during period of tenancy. 3) After redevelopment, the owner offered Mr. A a place which was less in area as compared to the area mentioned in earlier tenancy agreement. 4) In connection with such lesser area offered, owner paid a lump sum compensation of Rs. 14,00,000/- (including Rs. 1,31,500/- towards Stamp Duty and Registration charges) to Mr. A and entered into a lease agreement for future period. 5) Kindly suggest me the tax treatment of the said compensation of Rs. 14,00,000/- in the hands of Mr. A 6) Mr. A is a senior citizen having no other income. Thanks in advance.
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Capital gains treatment
Replies (4)
It is a capital asset transfer, as payment received in lie of certain property area. Hence capital gains liability arises.
1268500 is taxable in the hands of Mr A as capital gain, LTCG/STCG will depend on how long tenancy is going to be exchanged..
Thank you..
Thank you Mr. Anil for your response.
At first, if I am not wrong then the deduction in respect of Stamp Duty and Registration Charges is allowed u/s 80C.
Secondly, can the deduction u/s 54EC be availed in this case for the amount of capital gain arising i.e. Rs.12,68,500/- to avoid the tax burden?
Kindly advice on the same.
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