CA Shrawani Trivedi (Chartered Accountant) (51 Points)
30 September 2010if I have purchased property on Hire Purchase and sold it in the current year then whether Capital gain on that property will be calculated from the date when instalment has begin or from the date of registration of property???
Plz let me know about it.
sanjoy saha
(student)
(121 Points)
Replied 30 September 2010
Hello Shrawani,
1. For determining period of holding , point of acquisition is required.
2. A Hire purchase transaction is not regarded as transfer. So ,I presume that you have acquired the right of Capital Asset after paying agreed number of installments. After acquiring the right of property you can sell it.
3.Now the paradox,from what point shall we start counting the period of holding? Is it from the date of hire purchase agreement or initial installment or date of acquiring the right.
Well the crux is the date of registration of conveyance deed.
In case document is not registered but the conditions of Sec.53A of Transfer of property Act are satisfied ,date of agreement.
With Good Wishes,
Sanjoy
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