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Earning by selling small carpet area - Tax implications

Tax queries 340 views 3 replies

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.

Replies (3)
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

Thanks a lot Raj Sir.

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.


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