Capital gains

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 February 2014 Mr.X sold the property to Mr. Y for Rs. 47 Lakhs on 28.06.2012 and Mr. was not interested to register the sale deed and instead Mr. X offered Mr. Y to relinquish and release all their rights, titles, share, claim, interest and ownership for a total consideration amount of Rs. 61 lakhs on 25/11/2013.

Kindly provide me whether capital gain is applicable and Whether Short Term or Long Term?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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04 March 2014 1. Capital gain arises on TRANSFER of property.

TRANSFER is defined in Section 2(47) and includes the extinguishment of any rights therein.

Accordingly capital gain arises when rights in a property are relinquished.

2. Since the property has been held for less than 36 months, it is a short term capital asset and short term capital gain shall arise.