Capital gain in case of property under redevelopment

I wish to know about capital gain on redevelopment of property. Situation as follows:

X & Y had a property with 3 floors of X & 1 floor of Y. This property went into redevelopment & X recd say Rs. 1.5 cr and Y recd Rs. 0.50 cr in csah and one flat each valed by the valuer at Rs. 1.8 cr of X & Rs. 1.20 cr of Y. I wish to know following:

1) whether it is a transfer u/s 2(47)? Whether capital gain tax is attracted?

2) what is the treatment of cash recd by X & Y?

3) how to determine capital gain in this case? whether following calculations are correct?

In case of X, consideration in Cash.                       Rs. 1.50 cr

                                               Flat value.                      Rs. 1.80 cr

                                             Thus, total.                      Rs. 3.30 cr

          Less: Indexed cost of acq, say                     Rs. 1.20 cr

                       Thus, net cosideration.                     Rs. 2.10 cr

                    Less: Inv in NHAI bonds.                      Rs. 0.50 cr

                               Inv in new flat as above u/s 54. Rs. 1.80 cr

                               Thus capital gain.                    (-) Rs. 0.20 cr

Please reply.

Thanks.

Replies (4)

the question is not clear

Dear Sir,

My questions are as follows:

1) Whether the new flat recd in case of redevelopment of property comes u/s 2(47)-transfer of capital asset so as to attract capital gain?

2) If yes, then how to compute capital gain in this case? what is the sales consideration in this case?

3) Can we treat the MV of this flat as reinvestment of capital gain in new house u/s 54?

4) What is the treatment of cash recd? whether it is taxable?

Kindly reply.

Unable to get wat you need to answer!

Does the redevelopment requires demolition of the existing structure?.

Were documents trnasferred to the developer?

If not then it is a modification of asset

If, then having reagards to the decision made in Chiranjeev Lal Khanna v. ITO case , there is a transfer

Sale consideration shall arive by considering sec 50C

 

Need more details

Facts of the case are important, am giving link of the case for refference

https://www.google.co.in/url?sa=t&rct=j&q=Chiranjeev+Lal+Khanna+v.+ITO&source=web&cd=5&ved=0CEAQFjAE&url=http%3A%2F%2Fwww.kpmg.com%2FIN%2Fen%2FWhatWeDo%2FTax%2FFlashNews%2FKPMG-Flash-News-Chiranjeev-Lal-Khanna.pdf&ei=KT3wTu1nweqtB-GBsdoP&usg=AFQjCNFgeedUfe5Ba_uZ1ocbgXXcBQE2VA&cad=rja

 

 

 

 

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