Income Tax for Flat received under Court Consent Decree
My friend owes flat of about 500 Sq. Feet in ownership Co-operative Housing Society since last 45 years in Mumbai.
Since last 9 years he is having litigation with builder who has illegally constructed additional floors above existing old building of Society wherein my friend stays.
Now, builder has compromise with my friend and filed consent decree in Court. And as per consent terms builder has given two new flats of 500 Sq. Feet each of value about 50 lacs each in newly constructed building to my friend and he has surrendered his existing old flat to builder.
(1) As 2 new flats of total value 1 Crore is registered in my friend’s name,
(a) will my friend get inquiry from income tax department to give explanation about 1 Crore rupees and/or for any other purpose?
(b) Whether my friend is liable to pay any Tax on 1 Crore rupees?
(2) If my friend dispose off / sell either both or one flat then, whether he is liable to pay income tax on money which he get by selling said flat/s?
(3) If he has to pay income tax on amount which he get by selling said flat/s, then what are the legal remedy so that he get minimum liability of taxpaying?
YOUR GOOD SELVES ARE REQUESTED TO REPLY QUERY WISE.
Dear Mr Jain
We are Bangalore based firm , though we have limited operations in Mumbai. You should consult some Mumbai based consultants who will have more experience in redevelopment & consequences. However i found one good article which can help your questions http://www.phd-ca.com/Image/Direct%20Tax%20Alert.pdf