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Capital Gain on sale of residential Units

Gangeshwar (proprietor) (136 Points)

28 February 2020

several units were purchased in a housing projects. payments for the same was done in installments between 2010-11 and 2019-20 and all units were sold in the year 2019-20. Now how capital gain be calculated. Will the entire gain be LTCG or partly LTCG and partly STCG based on installments paid. Please suggest.

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9 Replies

Eswar Reddy S (CFO- at NHTF) (58263 Points)
Replied 28 February 2020

STCG and LTCG should be calculated from the date of receipt of Occupancy certificate.

Occupant certificate gives legal ownership for housing projects.

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Kapadia Pravin (17254 Points)
Replied 28 February 2020

The date of acquisition will be date on which agreement to sale is executed by builder and buyer party.

I don't think OC has any relevance to determine period of holding for LTCG or STCG purpose

Eswar Reddy S (CFO- at NHTF) (58263 Points)
Replied 28 February 2020

You bought house or invested in housing projects??

sabyasachi mukherjee (27117 Points)
Replied 29 February 2020

Long Term Capital Gain
arise if the transfer of capital asset arises after 12 months or more from the date of purchase.

Eswar Reddy S (CFO- at NHTF) (58263 Points)
Replied 29 February 2020

@ Kapadia Pravin -The tax payer has invested in housing project..So there was no house at the time of agreement to sell.

You can not judge based agreement to sell.Agreement to sell can be future date and there was no house at that time.

First there should be house and the tax payer should be the owner..

Atleast construction should have completed..

@ Gangeshwar:

You must check completion certificate & occupancy certificate

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sabyasachi mukherjee (27117 Points)
Replied 29 February 2020

Yes, checking of completion certificate and occupancy certificate .

Eswar Reddy S (CFO- at NHTF) (58263 Points)
Replied 29 February 2020

@ Gsngeshwar:
Payment of installments don't decide the nature of capital gain

sabyasachi mukherjee (27117 Points)
Replied 01 March 2020

Gangeswar

It's not important that the amount has been paid in installments or not.

when the sale deed is executed and completion certificate will checked by the buyer..

sale consideration less cost of purchase.

the date of agreement of sale is considered to be the date of sale....

whether u pay the installment now or afterwards or in parts is immaterial.