capital gains

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sunil (Querist)
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19 June 2009 if the assessee purchased an investment by making partial payment in such a way that when it is sold the period comes to more than 3 years and the remaining payment is done on that day that the holding period come below 3 yrs
what is the net effect will it come-long term or short term gains?
the assessee has booked the investment on the day of advance payment

Ratan Sharma

Ratan Sharma (Expert)
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19 June 2009 Dear Sunil,
In my opinion the date of agreement for sale or purchase are relevant for the purpose of calculation of capital gain tax. The mode of payment is not relevant whether you have paid in installments or full payment, is immaterial. Calculate the capital gain from the date when the agreement is entered into. for more details refer sale of goods act.