Hello All,

I booked a flat in Gurgaon on 15 February, 2011 for Rs. 1.70 Crore for which I have already paid an amount of Rs. 1.63 Crore. I have not yet taken the possession of the said flat, now I am finalizing the sale proceed of this flat  for Rs. 1.81. I just want to know that since I hav'nt take the possession of the said flat so can  I treat the profit as a business income  & adjust it with my regular business income / loss ( I owned a proprietorship firm & in leather garment business) or  it will be treated as a long term capital gain. Pls advice.    

 

hi Giridhar , assume you did'nt found any tenant now from april to sept your self occupied house will be house 1 and after sept you have a option to treat either one of the house as self occupied (it does,nt matter that no one is living in house 1) and the other house will be treated as deemed let out and accordingly chargable to tax. Treat that house as self occupied from where highest income could have been generated. ON THE OTHER HAND if you found a tenant say on 1 jan 2016 then your case will have 3 parts from april to sept - house 1 is self occupied , from oct to dec - treat either one of the house as self occupied , from jan to march - house 2 is self occupied house and house 1 is let out house and accordingly chargeable to tax.

Hello Ajeet ji, NO you can't treat it as business income as you have earned capital gain . What you are thinking is that since you have not taken the posession of the flat you have not purchase and sold any capital asset . See that's where you are wrong . After paying 1.63 crores what you have earned is a RIGHT TO TAKE POSSESSION of flat . Here that RIGHT is a capital assest and you have sold that capital asset for 1.81 crores . Therfore you have earned a capital gain and not business income.

Hi girdhar.....one house will be treated as Deemed to be let out....and other one will be self occupied....While calculating actual rent u will have to deduct num of months for which d house let out is vacant.... And after that ol the other calculations will take part....Case 1 treat house 1 as Deemed to be let out and house 2 as self occupied.....in case 2 treat house 1 as self occupied and house 2 as Deemed to be let out.....least tax proposal will be consider so that overall tax will be least...

Hello Ajeet...Capital Asset is defined in section 2(14) ....house property is considered as a capital asset.....as u have transferred the property after 3 yrs therefore it will be long term capital gain U/S 112 taxable @ 20%.....in d given case right of ownership is Capital asset.....hence it will be taxable as capital gain...u r misjudging it with the speculative business income U/S 43(5) PGBP....but in practical term speculative business time period is short term I.e from 1-12 months...but u r not in a speculative business.... U can invest the Capital gain amount in purchase of capital asset and claim exemption Under different section of capital gain

What are the Different Types of House Property?

A house property is an immovable property that you own. It can either be a residential or non-residential one. A residential house property is one that you occupy as your place of residence, while a non-residential one is used for commercial purposes such as carrying on business or a profession such as renting out shops or offices.

Type of House Property

You can own either a 'residential' house property or a 'non-residential' one. Residential property is a house you live in, whereas non-residential property is a house that you use for business purposes, such as running your own shop or office space. It's also known as commercial property because it's used for making money through rental income or sale prices of your home (or both).

Tax on House Property Income

Rental income from a House property is taxed. Even though the taxpayer's house....

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