The tenancy right is a capital assets and
surrender of tenancy right for Rs. 80 Lacs would yield Long Term Capital Gain
(LTCG).
The benefit of 10% tax rate without indexation
is available only on transfer of listed securities or unit or zero coupon bonds.
The benefit is not available to LTCG arising from transfer of tenancy right or
any other capital assets.
The important question that remains here is
about the tax-ability of such amount.
Tax-ability, tax saving options & other
implication would depend upon multiple factors and documents. Apparently, it
appears that the amount would be taxable in the hands of the firm as the tenancy
right belongs to firm.
MEMORANDUM
OF AGREEMENT
1. Date:
_____________________
2. Place:
____________________
3. Parties:
3.1 _____________________,
son of _________________, by faith – _____, by Nationality – Indian, by
Occupation - ________, residing at
_______________________________________.
(Tenant/First
Party, includes successors-in-interest and/or assigns)
AND
3.2 ____________________,
son of _________________, by faith – _____, by Nationality – Indian, by
Occupation - ________, residing at
______________________________________.
(Landlord/Second
Party, includes successors-in-interest and/or assigns)
Tenant,
Landlord collectively Parties and individually Party.
NOW
THIS MEMORANDUM OF AGREEMENT WITNESSES AS FOLLOWS:
4. Background:
4.1 Ownership
of the Second Party: The Second Party is the sole and absolute owner of and/or
otherwise well and sufficiently entitled to the land and building situate and
lying at the Premises known as ____________________________________ (Said
Premises).
4.2 Tenancy
of the First Party: The First Party is a monthly tenant in respect of a _______
[character of use] room having an area of _______ Sq. ft. be the same a little
more or less on the ______ floor of the building in the Said Premises [Tenanted
Portion] , at a monthly rental of Rs. __/- (Rupees _____________) only, payable
according to English calendar month. The Tenanted Portion is described in the
1st Schedule below.
4.3 Proposal
and Acceptance: The Landlord has now approached the Tenant to surrender the
tenancy and all other rights incidental thereto due to some exigencies and the
Tenant has agreed to surrender the tenancy and all other rights in the Tenanted
Portion as well as to vacate the same by delivering khas and peaceful possession
of the Tenanted Portion to the Landlord, subject to payment of a sum of Rs.
_______/- (Rupees _______________) only (Consideration) by the Landlord to the
Tenant towards the reimbursement the cost for shifting and
rehabilitation.
4.4 Mutual
Understanding & Recording of the Terms: The Parties upon negotiation have
amicably arrived at the terms and conditions for such surrender of tenancy and
conclusive and comprehensive terms and conditions superseding all previous
documents and understandings, if any, are now being recorded by this Memorandum.
NOW
IT IS HEREBY AGREED AND DECLARED BY AND BETWEEN THE PARTIES HERETO AS
FOLLOWS:
1. Surrender
of the Tenancy: The Tenant doth hereby agree to surrender his tenancy in respect
of the Tenanted Portion, described in the 1st Schedule below in favour of the
Landlord, upon payment of the Consideration by the Landlord.
2. Payment
of the Consideration: The Landlord shall pay to the Tenant a total sum of
Rs.__________/- (Rupees ____________) only towards the cost of shifting and
rehabilitation charges and/or compensation for the inconvenience suffered by the
Tenant to vacate the Tenanted Portion in favour of the Landlord in the manner
specified in the Payment Schedule, described in the 2nd Schedule
below.
3. Advance
Payment: The Landlord at or before hereof has paid to the Tenant a sum of
Rs.__________/- (Rupees ______________) only as an advance and part payment of
the Consideration and the Tenant doth hereby as well as by the receipt and memo
hereunder written, admit and acknowledge thereof.
4. Effective
Date: The Tenant shall cease to have all his right, title and interest in the
Tenanted Portion including the right of his monthly tenancy on and with effect
from __________ (Effective Date).
5. Delivery
of Possession: Within __________ from the date hereof the Tenant shall vacate
and hand over peaceful and khas possession of the Tenanted Portion to the
Landlord and shall obtain written receipt and acknowledgement thereof from the
Landlord.
6. Release
from the Liability: Both the Parties release and discharge each other from all
liabilities arising under the Tenancy or any variation of the terms of the
tenancy with effect from the Effective Date.
7. Representation
& Warranty:
7.1 By
the Tenant:
7.1.1 After
the Effective Date the Tenant shall have no right, title and interest in and
over the Tenanted Portion whatsoever and responsibility towards the Landlord, as
well as no other or further claim and/or demand from the Landlord, save as
specifically stated herein.
7.1.2 Upon
delivery of the possession of the Tenanted Portion to the Landlord, the Tenant
shall hand over vacant and peaceful possession of the Tenanted Portion after
removing all his goods and belongings and thereafter shall have no right to
enter into the Tenanted Portion and/or in the Said Premises.
7.1.3 The
Tenant has paid and cleared all electricity bills, telephone bills and all other
utility bills and there is no arrear in respect thereof.
7.1.4 The
Tenant has not created any interest over his monthly tenancy and/or has not done
any act or deed which may prejudicially affect the right of
tenancy.
7.2 By
Purchaser:
7.2.1 Upon
execution hereof the Landlord shall have no other or further claim and/or demand
whatsoever from the Tenant save and except as specifically stated herein.
7.2.2 The
Landlord shall pay the Consideration to the Tenant in terms of the Payment
Schedule below.
8. Interpretation:
8.1 Number:
Words denoting the singular number include, where the context permits and
requires, the plural number and vice-versa.
8.2 Headings:
The headings in this Memorandum are inserted for convenience only and shall be
ignored in construing the provisions of this Memorandum.
8.3 Definitions:
Words and phrases have been defined in this Memorandum by bold print and by
putting them within brackets. Where a word or phrase is defined, other parts of
speech or grammatical forms of that word or phrase shall have corresponding
meaning.
1st
Schedule
(Tenanted
Portion)
……………………………………….................................……
2nd
Schedule
(Payment
Schedule)
…………………………………………………………………..
9. Execution
and Delivery:
9.1 In
Witness Whereof the Parties have executed and delivered this Memorandum on the
date mentioned above.
____________________
____________________
[Tenant]
[Landlord]
Witnesses:
1.
Signature: _________________________
Name:
Father’s/Husband’s
Name:
Address:
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