Bought land from landlord's son. Due to reason money returned. Tax?

I am a tenant who entered into an agreement with the Landlord's son to buy my portion. Subsequently , another tenant turned up with a will of the landlord's father claiming title to the entire property. A lawsuit followed. I lost the suit and has decided to relinquish my tenancy right in this persons' favor. He has agreed to return the money that I paid to the landlord's son along with some extra consideration. I am a tenant from almost 1970s. What shall be the taxation treatment of this amount?

Answers (2)

103 votes

Tenancy rights is considered as a capital asset under the Income tax Act, 1961. Any consideration from relinquishment of such tenancy rights may result in capital gain taxation. However, it is understood that you are a tenant from 1970. Given such a scenario, the cost of acquisition needs to be ascertained in your hands. That would have an impact on your capital gain tax liability.

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304 votes

Thank you for your query. I would need more information to reply your query in the best possible way. We are require into the actual figures to evaluate and calculate.

Look forward to hearing from you.

Sincerely yours,

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