Flat redeveloped, man sells in 8 days for Rs 1.95 cr; gets notice, ITAT gives relief
The Income Tax Appellate Tribunal (ITAT) ruled in favor of a taxpayer who was denied long-term capital gains exemption after selling a redeveloped flat shortly after receiving it. The tax department had argued the sale was a short-term transaction, but the tribunal provided relief to the taxpayer.
Why it matters
The ruling provides clarity on tax treatment for property owners involved in redevelopment projects, which are common in urban Indian real estate.
You buy a flat and after some years the housing society gives it for redevelopment. You then sell the redeveloped flat within days of getting it and claim long-term capital gains exemption.But the Income Tax Department treats these as two different transactions and applies short-term capital gains tax. What do you do?In one such case a man faced a tax notice and subsequently had to appeal before the Income Tax Appellate Tribunal (ITAT), where he won relief.What the case is about The man had purchased a 510-square-foot flat in a housing society in Mumbai, during FY 2006-07, where he lived with his wife. Many years later, in FY 2012-13, the housing society entered into a redevelopment agreement with a builder. Under the arrangement, the man was allotted a replacement flat in the same society.
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in