Capital gain query of builder's flat

Tax queries 763 views 3 replies

C.A. Deepak Kakkar

C.A. Firm

104 Points Joined November 2008

Dear Members

Please give your comments on following query:-

If an assessee has booked a flat in Ansals. Payment was made through various instalments, and then possession was given to the assessee. After that the assessee has sold the flat. In that case capital gain will be computed from which date for indexation purpose & it will be a short term or long term capital gain??

Also if the same flat is sold before posseession after paying some instalments. what wil be the treatment??

Regards

Deepak Kakkar

Replies (3)

Amir

Learner

4016 Points Joined December 2009

Dear Deepak,

For CG purposes - Date of completion of construction or the date of possession will be crucial. (dont think there will be much difference between these two dates)

Cost will be indexed from the above date.

If right is sold before completion of construction or possession then it will be treated as Capital gain & whatever sum you have paid since beginning shll be treated as Cost of Acquisition.

To determine the nature of this capital gain i:e short tem or long term, agreement clauses has to be referred i:e upon payment of which installment assessee has got this right in the scheme.(cos sometimes there are some intial booking amount, which doesnot confer any right unless investor pays 1st big instalment)