• 54b query

Dear Sir,

One of my friend’s uncle sold an urban agricultural land in 5 cr last year in month of aug2020 (which was purchased in year 2014 at Rs 2 cr) and received 50 lac from purchaser as advance and handed over possession to the buyer on receive of 50 lac in month of august 2020. So I think sale of land should be confirm in aug2020 and the remaining amount will be receive in may 2022 . His capital gain comes to approx 2.75 cr. Now the time of filing is return coming soon .what should he do because he received only 50 lac and handed over possession already as above .he is not able to invest total gain arise from sale of agricultural land nor he is able to deposit amount in capital gain deposit sheme a/c. because he received only 50 lacs only. He is planning to purchase new land after june 2022 Please suggess what should he do and what is the impact because he is not able to deposit money in bank nor he can buy land at once due to non available of funds.
Asked 17 days ago in Capital Gains Tax

Has the property already been transferred? Is the registration completed??

For capital gain purposes, date of registration shall be considered as date of sale and capital gain will arise in the year of registration.

Lakshita Bhandari
CA, Mumbai
5572 Answers
661 Consultations

5.0 on 5.0

It is very weird if someone is just transferring possession based on 10% of amount received as advance.

If possession has not been transferred by registering any deed may be you can wait till 2022 when deed is registered and then show transfer.

 

Hope you find the information helpful, if yes do rate if 5 and provide your valuable feedback for my improvement.

Thank you.

Naman Maloo
CA, Jaipur
3893 Answers
52 Consultations

5.0 on 5.0

It depends on the terms and conditions of the agreement to sell. Mere transfer of possession does not mean transfer of immovable property.

 

For detailed discussion you may opt for phone consultation.

Vivek Kumar Arora
CA, Delhi
4243 Answers
408 Consultations

5.0 on 5.0

Then it's more of a legal matter to prove that sale has not taken place because as per Income tax act if the possession and ownership is transferred capital gain will be attracted and it has nothing to do with receipt of amount.

 

And hence if you need to claim exemption you need to deposit the amount in CGAS. Now your concern is correct that how to invest the money when same is not received but then you need to take a legal call and be ready for appeal if the transaction is questioned.

Naman Maloo
CA, Jaipur
3893 Answers
52 Consultations

5.0 on 5.0

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