Consent terms

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aspi (Querist)
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25 March 2012 A tenant is offered a sum of Rs.15 lac by his Landlord for surrendering the right and title to his rental flat ONLY AFTER HIS DEMISE. My query is that: Is Rs.15 Lac taxable in the hands of the tenant? Can Rs.15 Lacs be treated as Capital Gains? If yes, then, can the entire amount of Rs.15 Lacs be invested in Cap Gain Bonds u/s 54EC?

Arvind Tiwari

Arvind Tiwari (Expert)
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26 March 2012 Dear Sir,
Section 2 (14) defines Capital Assets where as section 2(47) defines Transfer by ITA-1961.
In Surrender also the Right is Extinguished & Correspondingly consideration is piad for such surrender

So Surrender of tenance right surely comes under the defination of Capital Assets

& as the cost of Acquistion is Nil, entire amount is your Capital Gain being liable for Capital gain tax

You can invest this money in NHAI Bonds to save the Capital gain tax