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There is a question while computation of Capital Gain or Capital loss on transfer of immovable property that incase payments were made in parts over a period, in which FY will the capital gain or loss be assessable. Further, it is important for the purpose of indexation also for the buyer. For eg. A
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FAQ :
A property transfer is considered complete for capital gains tax purposes when possession has been taken or retained by the buyer, as per Section 2(47)(v) of the Income Tax Act and Section 53A of The Transfer of Property Act.
The capital gain is assessed in the financial year in which possession was transferred to the buyer, not the year of the agreement or advance payment.
No, even if the entire consideration is paid and TDS is deducted, the transaction is treated as a transfer only when possession is handed over to the buyer.
For indexation purposes, the base year considered is the financial year in which the transfer (possession transfer) occurred.
Section 2(47)(v) clarifies that a transaction involving possession being taken or retained by the buyer is treated as a transfer for capital gains tax computation.
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