Long Term Capital Gain Tax - Residential property - Under Construction Flat


I have recently booked an under-construction flat in a residential project in Bangalore (the agreements with builder to sell and construct have been made in March 2012; builder has given me the allotment letter; and it is expected to get completed in 3 years).

I also have a flat in Hyderabad (taken possession in october-2008) and it is on rent. I am planning to sell this Hyderabad-flat, and planning to use the money for paying installments of under-construction flat in Bangalore.

Can you please let me know:-

a) Can I get exemption of LTCG tax in this case (if the new under-construction flat is booked before selling the old residential flat)?

b) For the purpose of LTCG tax exemption, what will be considered as the date of purchase of new under-construction flat? (Will it be the date of agreements to sell & construct OR will it be the date of allotment letter of under-construction flat OR will it be date on which Sale deed will be registered after three years upon completion of flat)

c) What is the time range during which I can sell-off my hyderabad flat (to get the LTCG tax exemption)

Regards, Amit

asked May 11 '12 at 14:00 by Amit2807 1111

  1. If possession for new flat is received within two years from date of sale, you can get tax benefit u/s 54.
  2. For LTCG tax exemption, possession date of new flat is used.
  3. You should sell Hyderabad flat within two years before possession of new flat.

answered May 28 '12 at 21:07 by Pankaj Batra 5.2k320


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Asked: May 11 '12 at 14:00

Seen: 1,697 times

Last updated: May 28 '12 at 21:07