Dear Sir,
I bought an apartment in Bangalore during the pre-launch of the project in June 2005. I made the bulk of the payments (~90% of the total cost) for the same based on the payment calendar from June 2005 till June 2008. The rest of the payments were to be made on handover like Electricity/Water/Generator/Carpark/Sinking fund/etc. However, due to the delay in construction the property was completed only after 2012.
I finally took possession paying the last installment & other charges only in May 2014. I had only taken possession of the flat from the builder (handover) but not registered the property as I was planning to sell it as a transfer.
Could you please advice on the tax implications. Since this property was allotted to me in June 2005 and I have made 90% of the payments between 2005 and 2008, and the rest in 2014, does it come under Long Term Capital Gain or Short Term Capital Gain? I read somewhere that the date of allotment and Date of Sale Agreement can be considered as the purchase date? Or is it the date of possession?
I had checked with few chartered accountants but most of them have not dealt with such a situation before. I got this response from an online forum: "Gains shall be Long term for the 90% of the amount, as gains obtained over transfer of rights in a property and not exactly house property." Can I go with this approach? I wanted to know your expert thoughts in this regard.
Kindly advice. Best regards, Sony G
