Vinay (Articled Assistant) (198 Points)
11 February 2012Hi,
A piece of land has been compulsorily acquired by local autority, in turn the assessee has received the TDR(Tranferable Development Rights) as compensation, wat is the tax treatment for receipt of TDR and is there any capital gain on sale(i.e. transfer) of TDR.. Kindly Post your suggestions.
Balendra Parmar
(Finance Manager)
(199 Points)
Replied 24 March 2012
Vinay,
Capital Gains on transfer by way of compulsory acquisition of land and building
[Section 54D]
Eligible assessee – Any assessee
Conditions to be fulfilled
There must be compulsory acquisition of land and building forming part of an industrial
undertaking.
The land and building should have been used by the assessee for purposes of the
business of the industrial undertaking in the 2 years immediately preceding the date of
transfer.
The assessee must purchase any other land or building or construct any building (for
shifting or re-establishing the existing undertaking or setting up a new industrial
undertaking) within 3 years from the date of transfer.
Quantum of exemption
If cost of new asset ≥ Capital gains, entire capital gains (short-term or long-term) is
exempt.
If cost of new asset < Capital gains, capital gains (short-term or long-term) to the extent
of cost of new asset is exempt.
Consequences of transfer of new asset before 3 years
If the new asset is transferred before 3 years from the date of its acquisition, then cost of
the asset will be reduced by capital gains exempted earlier for computing short-term
capital gains.
Income Tax
Balendra Parmar FM
Ventur Lighting India limited.
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
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