Ltcg stcg

Tax queries 1310 views 8 replies

Daxa manek

108 Points Joined August 2009

Dear all,

I have one query if you can help me out :-

Mr. A having no house property in his own name. He purchased one house property which was under construction and the payment details for the same are as follows:-

First payment made on 27.07.2009

Last installment paid on 19.12.2010

Date of registration is 11.09.2009

Date of possession is 05.01.2011

Now today Mr A is selling this house say on 25.06.2013 and purchasing new property.

what should be the date of acquisition for calculationg LTCG or STCG .

Is it date of possession or date of registration?

Is it LTCG or STCG?
Is registration charges paid for purchase of new property also forms part of new Investment for set of capital gain tax?

Thanks & regards,

Daxa Manek

Replies (8)

Guest

1) Date of acquisition for the purpose of calculation shall be the date of registration.

2) Assest is long term capital asset (LTCA) and any capital gain on LTCA is a LTCG.

3) Registration charges, will be dedcucted from the sale consideration.

4) There will be Indexation of cost of assest, registration charges.

CA Momin Owais Ahmed

Audit Manager

154 Points Joined December 2012

Yes Date of Registration will be the date of Acquisition,

and Registration Charges paid on New Property can be Consider in New Investment

CA LOVELY ARORA

C.A. B.Com (H) Graduate

2151 Points Joined August 2008

Agree with both...

Member

Management

325 Points Joined February 2010

Not so simple. I assume that the house was an independent house and what was registered was only the land portion. Mr A must have got possession after completion of the superstructure. In which case, CG on land will be LT and that on building will be ST. Sounds crazy, but this was a decision of some of the High Courts where the Department sought to tax the land and building consideration as STCG. The assessees argued that since the land was in their possession for a long time and only the building was held for less than 3 years, there should be bifurcation of land and bldg as LTCG & STCG. Courts agreed.

Mihir

Wealth Manager

5293 Points Joined December 2008

Long term capital gain. Registration charges, stamp duty paid is part of ltcg calculation.

CA Sriraghavan

Job

121 Points Joined March 2009

I agree with the Member comment as i had also come across such cases and as far as other questions are concerned i agree with Ashish Barthwal

Originally posted by : Member

CA LOVELY ARORA

C.A. B.Com (H) Graduate

2151 Points Joined August 2008

Dear Member,
Agree with what you stated in regards to Land and Building.
But this is not the case here, the assessee is purchasing just Building-Under Construction.. It in no way similar to Purchase of Land (though payment made before the building of construction). They are two different things.

It is simply LTCG... in regards to Property purchased, only building should be considered, not the Land.

Regards,