Opinion Of Eminent Legal Luminaries On Controversial Issues

Is Land Owner Entitle For Benefit Of Section 54F For Giving Development Right To Developers?

QUERY: In the joint development agreement, when land owner is entitled to 5 flats in a building to be constructed by the developer on land belonging to the assessee landlord, is exemption u/s. 54F available to the assessee land lord?
ANSWER: From the fact it is clear that land owner would retain the land and developer would allot five flats as consideration for transfer of development right to developer.

As per DCIT v. G. Raghuram [46 ITR 136 (Hyd.)], the cost construction of the proposed flats shall be reckoned as consideration for the purpose of computation of capital gains.

The landlord would be eligible to claim exemption under section 54F of the Act, if capital gain arising from transfer of development right, provided he complies with the conditions mentioned in proviso to section 54F(1) of the Act.

Posted in Income-tax
One comment on “Is Land Owner Entitle For Benefit Of Section 54F For Giving Development Right To Developers?
  1. grk says:

    My father gave land as gift to my two sisters, my mother, to me and also he kept one share to him. I:e, he gifted or divided his land to 5 parts and later we five went to development agreement and received one flat each including my father. In this does 15f applicable to each 5 of is? Do we need to pay any capital gains tax?

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