Hi
Since the allotment letter was received in 2009, it would be a Long Term Capital gain. From 2009, you hold a right to acquire the property which constitutes a capital asset.
You can claim the reinvestment exemption under section 54.
Short term capital gain or long term capital gain in my case
I booked a flat in Bangalore in 2009. This is how it proceeded further - 1. Apartment Buyer's agreement (with stamp duty) got signed in August, 2009. The agreement has many clauses one of which mentions - 'The Allotee agree that the allotment of Said apartment is not assignable nor the name of Allottee can be addded, substituted and/or deleted for a period of 1 year from date of execution of this agreement. 2. After multiple payments (which started in 2009), I get final demand notice in 2016. 3. I get possession letter in January, 2017. 4. The conveyance deed gets executed in June, 2017. My PAN card comes in jurisdiction of Noida, UP. Now, I want to sell of my flat and buy a plot in Haryana on which I will further construct my own house. Considering different case histories of India, and different views of advocates, I am confused if capital gain will be calculated from 2009 (Long Term Capital Gain) or 2017 (Short Term Capital Gain). I obviously want it to be LTCG as I have invested money and waited over years. This link - http://www.aiftponline.org/journal/Dec_Journal%202013/Whether%20booking%20period%20is%20to%20be%20included%20in.htm and similar link with different case histories suggest me that I should be safe selling it as my gain will be LTCG. Please suggest.
Asked 6 years ago in Capital Gains Tax
Yes, it will be long term capital gain and will be calculated from 2009 (assuming you have received allotment letter in 2009).
Further, you capital gan will be exempt to the extent you invest in buying new plot and construct house on the same subject to certain conditions.
Please feel free to call/ revert in case you need more clarity.
Thanks and regards
Abhishek Dugar
CA CS B.Com
You will have ownership rights on the property only upon registration. Till the sale deed is registered, the allotment letter is in the nature of a right over the property, which in your case is not transferable. Hence, the date of acquisition has to be treated as falling in the year 2017 only and not in the year 2009. Hence, if you sell the property within 3 years of acquisition, it will be short term capital gains only. You may need to balance between immediate receipt of money and tax liability.
Hello,
As you would have noticed that the section is not very clear and hence you have found so many judgements. It is very crystal clear that it is litigative in nature and you will have to fight your case out. There are a number of judgements in your favour which say that the period of holding is considered from the date of allottment, which in your case is 2009. So it can very well be considered as LTCG.
But just be mentally prepared that it will not be a smooth ride.
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
Hi All, Thanks for the responses. I have another query on taxes/gain etc. in my case itself. From what I understand is, whatever amount I get from buyer (let's say X), I will not get whole amount in my pocket. I will have to pay brokerage. There will be TDS deducted. 20% tax on LTCG, if applicable. So, that makes my in hand as X - (brokerage) - (TDS) - (20% tax on LTCG, if applicable) Will there be any other deduction like GST or anything else?
Asked 6 years ago
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