vccc (vvv) (28 Points)
17 July 2011I entered into agreement to sell a landed property on 1-3-2011 and I received token money of 2 lakhs on 1-3-2011 .
The total sale price is to be paid by purchaser by 31-03-2013 in 3 installments .
Registry to be done at 3rd instalment . There will be a capital gain of Rs.1.5 lakhs from sale .
My query is when will Capital gain become due to be paid -- now or after full payment is made or after date of registry ?
Sumit Grover
(Chartered Accountant )
(3652 Points)
Replied 17 July 2011
usually cap gain arise on date of transfer of property, i.e. when possession is received by the assessee(i.e. buyer)....
bt practically date of registery is taken as to be the date of possession......
so, i thnk in ur, in year of registery, cap. gain will arise.
plz correct me if m wrng
CA Hemlata Sharma
(Chartered Accountant)
(29 Points)
Replied 17 July 2011
| Originally posted by : sumit grover | ||
 |
usually cap gain arise on date of transfer of property, i.e. when possession is received by the assessee(i.e. buyer).... bt practically date of registery is taken as to be the date of possession...... so, i thnk in ur, in year of registery, cap. gain will arise. plz correct me if m wrng |
 |
yes u r right Sumit.
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 17 July 2011
| Originally posted by : sumit grover | ||
|
|
usually cap gain arise on date of transfer of property, i.e. when possession is received by the assessee(i.e. buyer).... bt practically date of registery is taken as to be the date of possession...... so, i thnk in ur, in year of registery, cap. gain will arise. plz correct me if m wrng |
|
agreed
sumit jain
(.)
(844 Points)
Replied 17 July 2011
Capital gain tax is attracted in the year of transfer of capital asset.
In your case, the transfer has already been effected because there is an agreement for transfer of property. Assuming that the posession of the property has also been transferred, the enjoyment related to property has been transferred to the purchaser. Hence transfer is complete.
Accordingly, you have to pay capital gain tax in previous year 2010-11, ie assessment year2011-12. It is irrelevant that the amount is received on later date or the property is not registered yet in the name of the purchaser.
Please correct me if i am wrong.
Kunal
(Risk Analyst)
(299 Points)
Replied 18 July 2011
Tarun
(CA Practice )
(166 Points)
Replied 18 July 2011
Hi,
As per the facts enumerated, the capital gain shall arise in the current year i.e the year of transfer because the agreement to transfer the asset has already been effected.
As per the definition the registry of the property does not holds any relevance in case the agreement to transfer the asset has taken place.
CA Abhiram Bharat.
(Assistant Manager Taxation)
(508 Points)
Replied 18 July 2011
see..undoubtedly,, registry plays an important role to claim an asset as got transferred..
but, whereas an agreement (wRITTEN ONLY)has taken place to the effect the transfer of the property. & ALSO THE POSSESSION HAS BEEN OBTAINED BY THE TRANSFEREE(BUYER)..CAPITAL GAIN should arise in the hands of the assessee in the year of agreement itself....THE POINT IS WHEN THE TRANSFEREE HAS GOT THE POSSESSION..?/
THAT IS THE TAXABLE EVENT IN TERMS OF SECTION 53A OF TRANSFER OF PROPERTIES ACT, 1882.
In Nathulal v. Phool Chand Supreme Court while interpreting Section 53-A culled out the following conditions to be fulfilled for making out the defence of part performance to an action in ejectment by the owner, as under:-
rEGARDS-
ABHIRAM
25 Hours GST Scrutiny of Return and Notice Handling(With Recording)
Survey, Search and Seizure under Income Tax Act 1961
CAclubindia
