10 January 2018
A client of ours booked a flat under Construction linked plan that was scheduled to be completed in 4 years. Amount was paid through his own savings in the beginning and through bank loan in consequential years. However, even after 6 years, it was still under construction. He sold off this flat without completion (after 6 years of booking) and reinvested the amount in another flat now. Could you please explain the tax treatment on this transaction including interest paid to bank as well. Your generosity will be highly appreciated.
10 January 2018
The under construction flat is a long term capital asset. Gain on sale , thus,is LTCG. Deduction u/s 54F can be availed for the amount invested in the new asset (flat).
CAclubindia
