Short Answer

Yes, there are tax implications for members during redevelopment, such as capital gains.

Detailed Explanation

Section 2(24) of the Gujarat Cooperative Societies Act, 1961 defines "member" as a person joining in the application for the registration of a cooperative society and subsequently admitted as a member. In the context of redevelopment, members of a cooperative society may be required to surrender their existing rights in the old structure in exchange for new rights in the redeveloped property. This surrender of rights can trigger capital gains tax implications for the members.

Rule 29 of the Gujarat Cooperative Societies Rules, 1965 outlines the procedure for the transfer of property rights in a cooperative society. When members transfer their rights during redevelopment, any gains arising from such transfers may be subject to capital gains tax as per the Income Tax Act, 1961. The tax liability would depend on factors such as the holding period of the property and the cost of acquisition.

In practice, members involved in the redevelopment process should consult with tax advisors to understand the tax implications of surrendering their rights and receiving new rights in the redeveloped property. They should keep proper documentation of the transaction to accurately calculate any capital gains tax liability. Failure to comply with tax regulations can lead to penalties and legal consequences.

Practical Examples

• Mr. Patel is a member of a cooperative society undergoing redevelopment. He surrenders his old flat and receives a new one in the redeveloped building. The difference in the value of the old and new flat may attract capital gains tax.

• Mrs. Shah transfers her rights in the cooperative society to the developer during redevelopment. The gains from this transfer are considered capital gains and are taxable under the Income Tax Act.

• Mr. Desai sells his share in the cooperative society post-redevelopment. The profit made on this sale is subject to capital gains tax.

References

• Section 2(24) of the Gujarat Cooperative Societies Act, 1961

• Rule 29 of the Gujarat Cooperative Societies Rules, 1965