Capital Gain tenure calculation

I have taken a ready property in a 10 year old building in January 2013 and made the final payment on 28th Feb 2013 and got possession on the day of final payment ie 28th Feb 2013. Now I intend to sell this property in July-August 2015. If I make an agreement with the buyer wherein i give possession in March 2016 but register it in Jul-Aug 2015 and receive all the payment in the same month. Will I have to pay tax under Long Term Capital Gains or it will be short term capital gains?
Asked 1 year ago in Capital Gains Tax from Mumbai, Maharashtra
In the above case you have to pay short term capital gain. If u register the property after feb2016 then only u will be eligible for long term capital gain. Registration itself connotes that you have given transfer of possession.
Shyam Sunder Modani
CA, Hyderabad
955 Answers
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It will be Short term capital gain.
Swapnil Patil
CA, Navi Mumbai
29 Answers
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Once a property is registered, the asset is transfered and hence capital gains will arise.  Since by July-Aug,2015, only two years would have been completed,hence short term capital gains will be applicable.
Shashank Surana
CA, Chennai
60 Answers
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The date of registration is the date on which the property is being transferred to your buyer. As this date falling in July/Aug 2015 is within 3 years from the date of acquisition of property in Feb 2013, it will be treated as short term capital gains.

It is advisable to wait till May 2016 atleast to sell the property so that you can take the benefit of lower taxation available for long term capital gains.

However, your decision to sell now or after Feb 2016 should also be after considering other factors such as the additional tax liability vis a vis additional price, uncertainty of prices, your need for funds.
B Vijaya Kumar
CA, Hyderabad
290 Answers
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