18 April 2017
1. For an apartment bought from a builder with payment in instalments, when does the apartment become a capital asset. I have been told it becomes one from the date of issue of the allotment letter by the builder, and the period for it to become a long term capital asset is calculated from this date. Is this correct?
2. If so, how is the indexed cost calculated? The instalments are paid over a long period of time. Please advise in detail Thank you R Chadha
18 April 2017
Normally when an apartment is booked with a builder, then it remains as advance only till the property is fully constructed. Once it has been completed and is fit for possession then it becomes a capital asset. Before that it remains as advance. You can show the period of holding from the date of allotment but this is debatable and subject to litigation.
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