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31 Jan 2015

Majority of people want to swap their old house for a new house. Thought of many people to swap reason may be to relocate to a new location, some other case, people want to renew to a large and newly designed house. Though swapping an abode is a new idea that has entered our country. Let us take a look on it. For example, we can consider a customer who has brought a 2 bedroom house in Chennai that has no negative Amarprakash builders feedback but is settled in Bangalore. He/she is thinking whether it is possible to swap the property with the one that is located in Bengalore. Asked the question whether the remaining cost can be given either in the form of cheque or cash. On the other hand, if he/she wants to swap his house for an apartment. Is there any possibility to swap the abode for a flat?

The sources said that this condition is happening already in small level and with local builders. But it is informed it depends on the condition and house age. Property developer are using this latest design idea by choking the tough phase of the property sector. Today, in most of the Indian cities, the property market is slow with the purchasers in the wait and watch mode. In earlier days, the builders used to wait for a long time for the price to pick up while now they are coming with new concept to push the sales. This idea can be beneficial and profitable for the builders who find it difficult to sell their land or flat in the outskirts. 

As part of this, many people ask the queries about the tax and legal implications in such exchanges. Further, this transaction increases capital value because of the asset swap. However, as per the section 54 of Income Tax Act 1961, the property that is swapped is a house, then the individual who is holding the house for more than 3 years will get the entire gain. On the other hand, if the property is a plot and it is with the owner for more than 3 years, then the profit can be claimed by the individual under the Section 54F. In both the cases, if the property is with a person for 3 years duration, then the difference between the cost and market value would be taxable.




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