Tax implications of property redevelopment

Your capital gains liability is attracted only when you receive something from the builder.  Since it is an inherited property,  "cost to previous owner " clause comes into play and this CG will be the price of the flat you receive + sum of money received (-) cost of acquisition (indexed or not depending on whether it is LTCG or STCG and whether you are a resident or non resident). 

Same holds good for lumpsum received. 

Please note that your liability is attracted only when you receive the property and not when you merely hand over your property as Sec 53A of Transfer of Property Act is not attracted in this case.  In case of lumpsum receipt, the date of receipt of money or registration whichever is earlier will determine the date of accrual of Capital Gains.

The Housing Society has FSI available.Members intend to enter into redevelopment agreement with Builder.All buildings will be demolished and new buildings will be constructed. Members will get bigger flats.Further Members will get cash component as well as rent during construction period for stay elsewhere. Additional flats will be sold by builder. Society will get maintenance deposit from members / builder as desired What will be the income tax implications for members and for society