Dear Pankaj Bhai:
I have sold my residential flat in Nov. 2011. I have invested entire proceeds to book a flat with a builder whom I know very well. The builder said that stamp duty registration will take some time as his proposal is held up at corporation level. I have received allotment letter & receipts. I am comfortable to wait. Now what happens if the stamp duty to purchase is delayed/never paid?
As you sold flat in Nov 2011, you need to compute long term gains on this sale.
As you invested gains into another flat, you are eligible for tax benefits under section 54. But possession of new flat must be received before Nov 2013 (end of two years).
If possession of new flat is not received before 31st July, 2012, you would need to open a capital gain scheme account and deposit gains amount (only gains part and not whole sale proceeds) into this.
There is no issue if Sale deed/transfer registration is delayed, but it should be done within two years of old flat sale.
Dear Pankaj Bhai:
I said I have invested entire proceeds in to new flat booking with builder. This includes capital gains component generated from sale of old flat. Only the stamp duty & registration will not take place within 6 months. Is it ok? Now I do not have any money left to be put in Bank capital gains account. All money has been given to builder to new flat booking.
If possession is not received before 31st July, 2012 and you don't open capital gain scheme account, you won't be eligible for section 54 tax benefit. You may consider opening capital gain account for a smaller amount declaring that remaining amount has already been paid to builder.
I think you have given a brilliant answer. I shall open a small capital gains acct. Then that is balance payment to builder to be paid on possession. Within 2 years, I shall pay-off this balance amount, then do stamp duty registration & take possession.
