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Taxability of corpus amount and rent from developer

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Ganesh Mahadevan

Executive

22 Points Posted on 17 January 2016

My Socety in Mumbai is under redevelopment. My flat is in my Father's name who is now 77 years old. Since 2004 he has had no income and hence has not been filing IT returns.

On account of redevelopment, he has now received Corpus amont and rent from the developer. The entire rent amount is being utilised towards the rent for the temporarty alternate accommodation. In the Development Rights Agreement, both these amoints have been mentioned as Hardship amounts.

My query is are these amounts taxable? If yes, how can it be saved?

Thanks

Replies (1)

dkshahca

51 Points Posted on 17 January 2016

Transfer of property act has not defined the term property. However, property includes interest in property. In case of redevelopment, if there is any alteration in your interest in the property, then amount receievd is taxable otherwise it will be capital receipt not chargeble to tax.

So far as retn payment is concerned, in my view this will not be taxable as it is attached to the redevelopment activity where income requires to be taxable if earned with any efforts.