The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has ruled that the sale of a redeveloped flat qualifies as a long-term capital gain under the Income Tax Act, 1961, making the taxpayer eligible for indexation benefits and exemption under Section 54F, Indian Express reported.
The order came while hearing an appeal filed by a Mumbai couple after tax authorities denied them long-term capital gains treatment and Section 54F exemption on the sale of a redeveloped flat during the assessment year 2018-19.
According to the report, the case arose from an order dated December 30, 2025, passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC).
Rajesh Shamji Furia and his wife had purchased a 510-square-foot flat in 2006. The property later became part of a redevelopment project under a development agreement executed on February 15, 2013.
Under the redevelopment scheme, Furia received a new flat comprising the original area, an additional 30 per cent area without consideration, extra space purchased from the developer and 185 sq ft gifted by his mother.
Source: money control
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