Question ID :
44973
Taxability of Sale of Transferabel Development Rights (TDR)
An agricultural land situated within the Municipal Limites of Thane Municipal Corporation (TMC) was compulsorily acquired by Municipal Corporation for DP Road project. TMC has allotted Transferable Developement Rights and issued DRC Certificate to the farmer against the area of land acquired in the DP Road. Immediately farmer has sold DRC certificate to a Developer for a monetory consideration of Rs.1.20 Crores. Whether amount received by the farmer will be exempt from Capital Gain Tax? Is there any case law to substantiate the claim? Please provide valuable insights.
Posted by
CA Ravish Thakur
on
Mar 25, 2026
Filed Under
Direct Taxes
It cannot be capital gains since there was no right as such. Hence it is a capital receipt having no charactor of incme...so not taxable .siva208@yahoo.com
Posted by
SIVADAS CHETTOOR on
Apr 02, 2026
Answer ID :
86121
“TDR received by the assessee were in the nature of compensation for compulsory acquisition of land so such rights have no ascertainable cost of acquisition and therefore, following judicial precedents, no capital gains can be computed under Section 48.” However, post budget 2023, it is taxable.
Posted by
CA. SATISH CHAND GARG on
Apr 09, 2026
Answer ID :
86134
If the amount is to be claimed as exempt, what disclosure need to be made in Income Tax return form? Which section will be applicable? Please clarify.
Posted by
CA Ravish Thakur on
Apr 14, 2026