Capital gain on Sale of Development Rights

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kanika (Querist)
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21 November 2009 Dear Experts,

Mr. A had a self occupid property on which only ground floor was constructed. He entered into an agreement with the developer for sale of Terrace rights to the developer for a consideration of Rs. 10,00,000 plus renovation of his portion.

How mush will the capital gain be in as the COA in this case will be Nill. Secondlly can i claim exemption u/s 54F as Mr. A owns only one property.

C.A.Amitabh Gupta

C.A.Amitabh Gupta (Expert)
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23 November 2009 Since COA is Nil- Capital gain will be Rs.10 lacs. Mr. A can claim exemption u/s 54F if he has purchsed a residential house within 1 year before the date of transfer or 2 years after the date of transfer or constructed within 3 years after date of transgfer and he should not own more than one residential house on the date of transfer and should not purchase and 2nd residential property within 2 years after such date or construct within period of 3 years.