Capital gain Tax on Under Construction flat

ashu_svits 1
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Hello Sir,

I booked an under construction flat in mar 2008. I made the partial payment initialy builder and then in installment as it was under construction flat. So in march 2008 I paid 8 lakh , I paid installments till may 2011. Total amount paid to builder was 2350000. I sold the flat in October 2011, it was still under constructio and possesion was NOT received, I sold it for 2600000. Net profit is 250000 (white), Now, as i sold it after more than 3 years from date of booking, will it be a long term capital gain or as I paid installments till may 2011,it will be shot term capital gain

Please help

Regards, Ashish

sale-before-possession under-construction capital-gains income-tax
1 Answers

In this case, you never had an asset in your name... The only thing that you got by making payment to the builder was a right to acquire an asset... And the thing that you sold was also right to acquire an asset...

You bought a right to acquire an asset and you've sold a right to acquire an asset... The holding period is also more than 36 months... So this should be long term capital gain on the sale of "Right to acquire the asset" and not on the "sale of the asset"

CA Karan Batra532
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