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Redevelopment land owner: How to utilize long-term capital gains?

Mihir

Mihir Tanna  |1057 Answers  |Ask -

Tax Expert - Answered on Oct 09, 2024

Mihir Ashok Tanna, who works with a well-known chartered accountancy firm in Mumbai, has more than 15 years of experience in direct taxation.
He handles various kinds of matters related to direct tax such as PAN/ TAN application; compliance including ITR, TDS return filing; issuance/ filing of statutory forms like Form 15CB, Form 61A, etc; application u/s 10(46); application for condonation of delay; application for lower/ nil TDS certificate; transfer pricing and study report; advisory/ opinion on direct tax matters; handling various income-tax notices; compounding application on show cause for TDS default; verification of books for TDS/ TCS/ equalisation levy compliance; application for pending income-tax demand and refund; charitable trust taxation and compliance; income-tax scrutiny and CIT(A) for all types of taxpayers including individuals, firms, LLPs, corporates, trusts, non-resident individuals and companies.
He regularly represents clients before the income tax authorities including the commissioner of income tax (appeal).... more
Asked by Anonymous - Oct 05, 2024Hindi
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Have given land for redevelopment to a promoter in 2022. Entire land was in my name & the project is expected to be completed by mid 2025. As per the Development Agreement I will be alloted more than one apartment, commercial office & shop in the project once completed and handed over. I understand that once the completed apartments, office & shop are handed over to me by the promoter, I will be liable to pay LTCG. Since I am to receive more than one apartment plus an office & shop, I may not be allowed to reinvest the LTCG amount towards purchase of another property. Is there any way the LTCG amount can be beneficially utilised by me ?

Ans: As per Income tax provision, possession date is not important but date of completion certificate is important.

For tax exemption on LTCG, you can check provisions of 54EC and invest the gain amount (if possible) in specified bonds within 6 months of receiving completion certificate.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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