Long term capital gain

Q: I have a property allotted to me in 2010. The actual possession was in 2014. For Long Term Capital Gain is date of allotment be considered or date of possession?
I have booked a new flat last month under the subvention scheme. Can I buy a new house other than this one from the sale of the first house? Am I eligible for tax exemption

Shilpa Sood, Apartment Resident

22nd April 2016

Property Tax in Gurgaon

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Replies (3)

Hi all,
A considerable issue which arises in context of transfer of rights in the property under construction as well as in case of transfer of property (after taking the possession) is - whether the gain on transfer is short-term or long-term?

Vineet Tendulkar, Mumbai

13th May 2016

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Hi Vinnet,
To qualify the investment in case of builder flats, the crucial date is the date of allotment of the residential flat and the payment of installment is a follow up action. Allotment is a sufficient compliance for getting the benefits, even if the taxpayer has not paid all installments due under the said scheme.

Indranil, Gurgaon

13th May 2016

Thanks for the reply!!!

Shilpa Sood, Apartment Resident

22nd July 2016

Hi Shilpa,
Duration of cap gains must be based on date of allotment. It is very important to find out the date of purchase of the property because it is this date which will determine the nature of Capital Gain namely whether the Gain is a Long-term Capital Gain or a Short-term Capital Gain.

Indranil, Gurgaon

13th May 2016

Comment

Yes, it is a great advantage to tax payers selling a property with different dates of allotment and different date of possession of the property. Thus, the capital gain arising to the assessee would be long-term capital gain taking into consideration the date of allotment and not the delivery of the possession.

Jamuna sikhri, Delhi-NCR

13th May 2016

Hi Shilpa!!!!
If you sell a house within 3 yrs of buying it, the tax benefits on the principal repayment and interest paid on the home loan are reversed. These are then included in your income when you file your tax return. Also, if a house is sold within five years of the end of the financial year in which it was purchased, all the deductions claimed under Section 80C with respect to the property are added to the taxable income in the year of sale.

Nithin, Gurgaon

13th May 2016

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