ICICI

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Earning by selling small carpet area - Tax implications

Ram K (NA) (103 Points)

26 September 2021  

Dear Sir/Madam,

I might face following case. Our building is to be redeveloped and the builder is saying that for some technical reasons I might have to give up some carpet area in the new flat like say 15 Sq feet. Builder is ready to compensate the same by paying me at the market rate for that  15 Sq feet. This I guess shall also come in the agreement.

This amount is now earned by selling a small carpet area to the builder. Is this taxable and if yes how do we consider it for taxation? Under LTCG or income from other sources? If LTCG what should be then considered as cost of acquisition? The flat was originally bought by my parents sometime in I guess 1976 or so!

Thanks and regards.


 3 Replies

CA Raj Doshi (Practising CA) (5528 Points)
Replied 26 September 2021

Apply the cost inflation index to the fair market value of the flat on 01.04.2001 to arrive at indexed purchase cost.

Sales value of 15 Sq.ft
Less : indexed cost of 15 Sq.ft
=LTCG

tax @ 20% + cess
1 Like

Ram K (NA) (103 Points)
Replied 26 September 2021

Thanks a lot Raj Sir.

srsubramanian (retired person) (74 Points)
Replied 16 October 2021

For short term capital gain or LTCG whether the property are to be registered property.
under sec 54 where does it say that the property should be registered property.

Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register  





Subscribe to the latest topics :
Search Forum:

Trending Tags