Whether this attracts capital gain or it will be taxed under IFOS, please advice?
If a person say Mr. A books a flat and pays 6 installments (Rs. 10 Lakhs) out of 12 installments. Ownership will only be transferred after paying full installments. Now at this point Mr. A makes an arrangement with the seller Mr. B and transfers his name to some other buyer Mr. C for which the seller Mr. B charged brokerage. Now the original buyer Mr. A got Rs. 15 Lakhs after transferring.
27 July 2012
If Mr A is in procession of house and satisfied Sec 53A of Transfer of property act then Mr A is deemed owner of property, Hence capital gain arise through this transition and Gain is chargeable in the hand of Mr A.
27 July 2012
Dear Friend, since possession of the property will be transferred after payment of full instalments as described.He does not become the owner at the time of negotiations and hence the profit of Rs. 5.00 Lacs is not Capital gain. The same will be treated as IFOS.Thanks
CAclubindia
