Upgrad LLM

capital gain enquiry

I am going to sell my tenacy right of a land (running a factory since 30 years on a vacant land and the super structure build by me)

Please let me know the kind of taxation on the sale amount,  since I am not the owner of the plain land but only compount wall and sheds.


capital gains on sale of the shed



If the tenancy rights are also relinquished then in case you are receiving any compensation /consideration you will attract capital gains.

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Chartered accountant

The tenancy right is also a capital asset and as such the sale will attract the capital gains levy. If cost cannot be ascertained it shall be taken as NIL.


The sale of tenancy rights will attract Long Term Capital Gains Tax  with zero cost of acquisition.

However, if you have claimed depreciation on the structure, the difference between sale consideration and wdv of block of asset shall be trated and taxed as Short term capital asset. So please be mindful while assigning value to the structure as more the value, more you have to pat STCG tax which is higher than long term capital gains tax.

further you can claim exemptions agains the long term capital gain which are not available in the case of STCG.




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