I formed newly huf consist of me, wife and son. Can i receive my share of sale proceeds of ancestral property directly to new huf bank account and claim deduction under section 54 rather to recceive that in my individual account. if yes what are the steps i need to follow to do this. and any income earned from this sale proceeds is taxable in the hands of huf or individual?
I inherited a parcel of ancestral land with old building along with other relatives. We entered a Development Agreement and received new flats after construction, being roughly 50% of the total number of flats. How will Capital Gains be calculated on each flat? If we sell the new flats without holding them for 2 years, does it entail LTCG or STCG?
Hello @sindra
When an individual transfers ancestral land or buildings through a registered Joint Development Agreement (JDA), capital gains are triggered in the year when the local authorities issue a completion certificate (full or partial) for the project. The sale consideration is determined as the stamp duty value of the flats received in the project, along with any cash consideration. The capital gains are then computed as per Section 48 of the Income Tax Act.
If you sell the newly received flats within 24 months, the gains will be classified as short-term capital gains (STCG) and taxed as per your applicable income tax slab rate.
You can refer to a detailed article here Joint Development Agreement.
Hope this helps!