02 March 2013
sir mr. A got allotment letter for residential plot in 2009 from a company and sale deed is registered in 2011 thereafter he constructed residential house on that plot and sold his residential house in 2013
sir please tell is that residential house considered as long term capital asset?? or only plot is considered as long term capital asset??or both considered as short term capital asset
02 March 2013
Kunal treatment of LAND will also depend on the actual possession.
If the possession was also got in 2011 then it will be treated as short-term asset.
And in my opinion since the House will be integral part and parcel sold with the land it cannot be treated separately. Will have to take cost of construction under cost of improvement.
According to section 53A of Transfer of Property Act 1882, the transfer of Ownership has taken place if the immovable property possession or part of possession had transferred from thepurchaser to vendor. In your case the allotment letter received in 2009. Hence you can claim it as an long term asset.
09 October 2021
Possession of the plot if received in 2009, then it will be considered as long term; otherwise short term, with construction on it as cost of improvement.
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