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Re-Development of Property

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Ghanshyam Patel

26 Points Posted on 31 December 2020

Pls help me with this doubt:

As per the Joint Development Agreement there exists RENT payment from Builder to REO(Real estate owner). As the possession is transferred to builder for redevelopment of property so capital gain is charged as per sec 45(5A) in the year of certificate is received.Then whether Rental income will be charged to HP or to capital gain u/s 45(5A) or charged in IFOS ?

Replies (2)

Quick Summary

This discussion clarifies the tax treatment of rental income received from a builder during a property redevelopment project. It explains that while capital gains might be charged under Section 45(5A) upon receiving a certificate, the rental income itself is typically taxed under Income from Other Sources (IFOS). However, relief is available for rent paid on alternative accommodation, with the remaining rental income being taxable.

queryinsta054@gmail.com

140 Points Posted on 31 December 2020

The rental received from builder will be not be taxed to the extent it is utilised to pay rent in respect of the alternative accomodation. The balance amount will be taxable as IFOS.