An assessee book a flat and pay his installments without taking possession as the flat is under construction. After four years he sells the flat which is still under construction. Under which head it is taxable and why, is it a transfer of immovable property as the assessee is not in possession of the property.
2 Replies
Satish
(CA Final Student)
(479 Points)
Replied 06 September 2009
The transaction would be chargeable in Capital gain only as it would be the relenquishment of right on the flat. Right to sell the can be excercised only when there is right of ownership. Even though the property is under construction, the capital gain would be only on transfer of right.
vikaskamra
(CA Final Student)
(132 Points)
Replied 06 September 2009
It is a case of substance over form, irrespective of whether the assesse has got the possesion the underconstruction flat will be taxed under capital gains head as it is a capital asset..
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