• Sale of unregistered flat

Dear sir, I booked a under construction  flat in 2011 at a total value of 20lakh upfront down payment, which I got possession letter in  March 2014. Now in Oct  2017 I want to sell it at 35lakh. The flat has not been registered and I want it to sell via tripate agreement between me, purchaser and developer.  Please inform if I can use cost inflation index to save Long term capital gain as the property is not yet registered . Please inform what tax implications is there and how can I save tax on the sale. This is a single property in my name. 
Asked 12 months ago in Capital Gains Tax from Delhi, Delhi
LTCG shall be applicable as you had got the possession letter.

Indexation shall be applied to know the indexed cost of acquisition. Your sale proceeds less the indexed COA shall be the capital gains.

You can invest the amount in 54EC bonds within 6 months of transfer or invest in another house property within 2 years or construct withing 3 years of transfer in order to save the capital gain taxes.
Lakshita Bhandari
CA, Mumbai
2021 Answers
63 Consultations

5.0 on 5.0

The indexation for cost of acquisition shall be computed for the year of allotment. The holding period of the property shall start when it was alloted to you and hence use CII for 2011.
Lakshita Bhandari
CA, Mumbai
2021 Answers
63 Consultations

5.0 on 5.0

Hi,

Yes, you can claim the indexation beneift. The date of allotment will be the date of purchase. If you have paid the amount on or before the date of allotment, you can apply indexation from he date of allotment.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards
Abhishek Dugar
CA CS B.Com
Abhishek Dugar
CA, Mumbai
3469 Answers
156 Consultations

5.0 on 5.0

for capital gain date of allotment in considered
Lalit Bansal
CA, Delhi
557 Answers
37 Consultations

5.0 on 5.0

Hi,

Since you have received the allotment letter, you can claim the sale as long term capital gain. The inflation index will be for 2011.

You can save tax by either investing in another residential property or in NHAI or REC Bonds.

Regards,
Keerthiga Padmanabhan
M.Com., CA, LL.B
Keerthiga Padmanabhan
CA, Greater Mumbai
784 Answers
23 Consultations

5.0 on 5.0

Date of possession should be consider
Vishrut Rajesh Shah
CA, Ahmedabad
605 Answers
12 Consultations

5.0 on 5.0

Hello,

This is a debatable option. The Assessing Officer will disallow your claim for indexation saying that the due amount was not entirely paid by you. 

On a safer side you may only claim the indexation on the amount paid by you i.e 20 lacs, but be prepared for litigation.

Trust this clarifies your query. 

Feel free to call / get back in case of further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, FCA, LLB, CERT. FAFP
Rohit R Sharma
CA, Mumbai
2104 Answers
91 Consultations

5.0 on 5.0

Ask a Chartered Accountant

Get tax answers from top-rated CAs in 1 hour. It's quick, easy, and anonymous!
  Ask a CA