Surrender of tenancy right under the pagdi system.b

This discussion explores when tenants under the Pagdi system are considered to have surrendered their tenancy rights during redevelopment, and consequently, when capital gains tax becomes applicable. While the relinquishment of rights occurs upon agreement registration, taxability typically arises upon receiving possession of the new property. Fortunately, capital gains may be nil due to reinvestment in a new home under Section 54F of the IT Act, offering a significant benefit to tenants who receive ownership flats.