Taxability on Property income

[ASHISH DESAI]

A person has received Rs. 16 lacs from the developer of the property in which he stayed for more than 65 years.(ancestoral property)towards surrendering his Tenancy Rights in the said House. There was a meagre amount might have been paid under a 'old Paguri system'by the late grandfather of the assessee. figure is not known to the assessee but he has spent appx. 5 lacs in all these years twds. major repair. kindly advise on the taxability of the receipt of Rs. 16 lacs being amount recd. on surrender of tenancy rights of the residential house. if taxable under the head cap. gain, indexation benefit on which amount is permissible? if as a income from other sources, deduction of amt spent is permissible?

AI Summary

Surrender of tenancy rights for Rs. 16 lakhs not taxable as per Supreme Court ruling; no capital gains or income tax. A person received Rs. 16 lakhs from a developer for surrendering tenancy rights on an ancestral property occupied for over 65 years. The original payment under an old system by the late grandfather is unknown, but approximately Rs. 5 lakhs was spent on major repairs over the years. The query seeks advice on whether this receipt is taxable as capital gains, considering indexation benefits, or as income from other sources, allowing deductions for expenses. The reply references a Supreme Court decision indicating that the surrender of tenancy rights is not subject to tax.