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Manoj Ahuja (Project Manager)     23 August 2021

Property sale - redevelopment case/ inherited

Respected Sir(s),

Property Purchased by Grandmother: 1984 (Decased in 2007) 

Property Transferred to my name: 2019 - Name Added on Society Share Certificate, No issues on Title. 

Type: 1 BHK in a Co-operative Housing Society in Sion, Mumbai of around 570 carpet. 

Current Situation: Society has gone for Re-development from October'20. Possession Due in Mar'22. Will now get a 3BHK Flat of around 900 Carpet. 

Query: After the possession in 2022, if I want to sell this property and immediately buy another flat, do I need to still pay LTCG? If yes, is there any work around to avoid this tax? Point to note is that this was a 30+ year society before Redevelopment and in the past 10-15 years, I paid a lot for its repair and maintainence. 

Kindly advise on the options available for me if I want to sell this flat post the possession. I am also willing to invest in Government Bonds if needed. Would that help? 

Target selling price should be around 1.75 Cr in 2022. 

 3 Replies

G.L.N. Prasad (Retired employee.)     23 August 2021

The issue involves no litigation and guidance on how to avoid tax is involved.  Please consult a Chartered Accountant on accounting of a capital gain, if such sale is permitted legally.  You have decided to sell the flat and it appears that only payment of legitimate tax in the future is involved. You can invest such an amount in investments like bonds.  The income on those securities has to be considered taxable after the sale. (Principal may get an exemption but not income on such investment.

P. Venu (Advocate)     23 August 2021

Yes, the posting is really speculative and suggests no legal issues. 

Dr J C Vashista (Lawyer)     23 August 2021

I concur advise of Mr. GLN Prasad.

No legal issue is involved in the facts posted by you for consideration and obligation of legal experts on this platform.

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