Now days TDR transferrable development rights)- as Fungible FSI instaed of monetory compensation, is issued by state authorities / Municipal Authorities, so sale of TDR certificate as part or in whole is a business income or STCG or LTCG
dahaless @ gmail.com
There are two types of commrecial transactions that are happening( in particular in Maharashtra and karanataka), in matter related to land reservation-acquisition -comepnsation ( as authorities do not have funds , hence issuance of TDR) TDR is Transferrable developments rights as Fungible FSI, such that, if is land is reserved for a municipal purpose, then instead of payment of monetory compensation to land holder, Authorities issue a TRANSFERABLE CERTIFICATE of utisation of rights -FSI to develope-cosntruct as equivalent area that can be LOADED on other buidable private plot in the same city.as this is a transaction of nature of conveyance.
so some people ( Mr.ABC) tend, to sale only basic rights to some BUILDER( MR.LMN) , who can get basic rights of that affected-designated-reserved plot / land in his favour , Do all formalities inclding fisrt buying those rights by aconveyance deed-power of attaorney and then doing a regd.conveyance of the same favoring municipal authorities , and muncipal authorities issue that TDR certificate favoring later perosn i.e.Mr.LMN ; that is called SALE of RAW TDR , let us call this as case A-1
in some cases people whose land so affected -reseved-designated ( MR.ABC) completes all formalities , including specific conveyance deedwith municipal authorites , and take that TDR certifiacte in his own name i.e.Mr.ABC it is termed as ready to use /load TDR let us call this case as B-2
in later case this TDR( being a matured-ready to use /load) is being sold -loaded at diffrent dates ( AY) to different persons again by a various convaynce deeds.
so querry is this as affected-reserved land is relinquished in both cases , whether alienation of rights favoring MR.LMN by Mr.ABC by fisrt deed of conyance is sateg I, with Mr.LMN ( facilitator / buider) relinquishing that land by Mr.LMN to municipal authority for geneartion of TDR again by conveyance deed called as stage II, f
query is this in case A-1, whether relinquishing right -POA by MR.ABC favoring MR.LMN is business income or STCG or LTCG for Mr.ABC ; and second part of query is in case of MR.LMN , further loading for himself and resaling TDR to Mr.XYZ, Mr.PQR of that TDR/ part of TDR is it a Business income or STCG ( being done within few months........ a year)
and in case B-2 though affected -reserved land is relinquished by MR.ABC favoring Municipal authotity and TDR certificate is also favoring Mr.ABC ( original owner) then its further sale / loading by MR.ABC to MR.LMN , Mr.PQR. Mr XYZ at different dates ..AY for couple of years .
query is this those multiple transactions of sale of TDR - fungible FSI ( which can be sold / conveyed / loaded -technically ...in parts also) is a business income -STCG or LTCG ( as land belonged to him for more than 3 years)
CAclubindia
