Selling house after redevelopment tax implications

Hi

After the new union budget how will tax be calculated on sale of flat after redevelopment. 

My case is as follows

I purchased a flat of 800 sq ft in 2003 for 32 lacs

Then in 2023 my building went into redevelopment. 

Now instead of 800 sq ft my new flat will be of 1000 sq ft

If i follow the new tax that is implemented after the union budget i will be paying a lot of tax

For understanding if i sell the house for 3 cr then as i can not take the benefit of indexation my total tax income will be 3cr less 32 lacs which is 2.68 cr

What can i do to factor in the new tax implications and save tax on house sale. 

I do not intend to buy another house. 

Can i do an agreement with the builder where he can show that the additional 200 sq ft given due to redevelopment has had a cost and my actual cost of the flat is 32 lacs + this x amount. 

Please advice

 

Replies (2)
Quick Summary
This discussion explores the tax implications of selling a property after redevelopment, particularly in light of recent Union Budget changes. The user is concerned about increased tax liability due to the inability to claim indexation benefits on the original purchase price and the increased square footage. They are seeking advice on potential tax-saving strategies, including negotiating with the builder to account for the cost of the additional space, and understanding how corpus money received from the developer affects capital gains.

It is advisable to consult a practising CA as there are multiple issues involved. It needs detailed analysis as following queries arise:

  1. sec 45(5A) is attracted due to redevelopment and accordingly capital gains will be calculated on the old 800 sq ft flat. Also corresponding deductions need to be considered on the acquisition of 1000sq ft flat.
  2. capital gain is also attracted on the proposed sale of flat of 1000 sq. ft.

YOU NEED TO CONSIDER CORPUS MONEY YOU RECEIVED FROM REDEVELOPER, YOUR LTCG PLUS CORPUS MONEY.

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