Thanks Mr. Sanjay Singh Rana, I have allready purchased a new flat amounting Rs. 13 lacs then my taxable income under LTCG is 2 lacs ? And I totally agreed with the matter of rent paid. I don't understand why Mr.Mayank & Mr. Muguntha Narayanan says that I am not paid any rent. Should they told me when the tenancy rights are arises ? Thanks.
 

Dear Santanu,

        Tenancy rights arise only if there is some agreement between u and ur house owner. Suppose u take  a house on lease for 20 years. The owner after 10 years asks u to vacate the house. In this case, u will have the right not to vacate the house. Any amount which u receive in such circumstance will lead to CG, due to extinguishment of right.

        However, in the said case, u r vacating the property. Assume u r approached by ur owner on jan.2010, and asked to vacate in 3 months. In such cases, u have the right to stay upto march 2010. thereafter u dont have the right to stay, coz, u have not entered into an agreement to stay in the house for life. In such case, u r not extinguishing ur right. Its ur duty to vacate the house (due to lack of agreement to stay long). SO u cant tax it under CG. Pls read Drummond vs Brown case

Tenancy right is a self generated asset & it generates as soon as tenant occupies the property for which he is going to pay rent, it is no where written in the act that rent agreement or contract is necessary.

And i want to ask from CA.G.Muguntha Narayanan sir, that in case tenant do not posses any right why he has been paid 15lac rs which is not a small amount. If owner can easily vacate the property what is the need of paying 15lac to tenant ? 

Thanks

Dear Sanjay,

              I do agree with u that in the Income tax act, there is nothing mentioned about the agreement. However, the right is accrured on a tenant only if there is a tenancy or rent agreement (pls. read Indian Tenancy Acts). In the absence of such an agreeement, the tenant as well as the owner do not have any inherent righs. In the absence of such agreements, the owners try to vacate their tenants by giving them some lump sum amount. this amount is not CG because for the reason that there is no extinguishment of right. When there is no right for the client, how can it be extinguished.

              I will tell u a situation in which it is a CG. There is an agreement between teant and  owner, as per which tenant can stay in the house for 10 years. After 5 years, the owner asks the tenant to vacate the house. The tenant has the right not to vacate the house. In such case, the owner pays him some lump sum amount for giving up his right. Hence, it amounts to extinguishment of right and CG

            Correlating the I.T. act with indian tenancy acts will give a better understanding