Capital gain

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This query is : Resolved

AMIT DHINGRA (Querist)

04 December 2015 IF PAYMENT OF PROPERTY IS MADE IN INSTALMENTS

1 SOME PAYMENT BEFORE POSSESSION
2.SOME PAYMENT AFTER POSSESSION

AND SOLD AFTER SOME PERIOD

THEN HOW WE WILL CONSIDER INDEXATION FOR THE COST
QUERY
1. BY ADDING ALL INSTALMENTS AND THEN IMDEXATION AS PER POSSESSION DATE OR
2. YEAR BY YEAR ON INSTALMENTS BASIS INDEXATION.

PLZ GUIDE ME

Amol S Joglekar

Amol S Joglekar (Expert)

04 December 2015 Cost of property is the actual cost to the purchaser.

In a phased out payment manner, the payments are made towards ADVANCE and hence should NOT be confused with INDEXATION.

My simple request would be.....Try to make the accounting entries in say TALLY (Or any other financial software) for the query you have raised.

01. At the time of booking the flat
debit advance for booking flat
credit bank

02. at the time of registration of agreement
debit advance for booking flat
credit bank

03. at the time of first slab
debit advance for booking flat
credit bank

04 at the time of second slab
debit advance for booking flat
credit bank

05. at the time of third slab (assuming bank loan)
debit advance for booking flat
credit bank loan

06. at the time of final payment (assuming bank loan)
debit advance for booking flat
credit bank loan

07. Once the possesion is taken/ transfer takes place / conveyance is done

debit Flat
credit advance for flat

So? now what is your query?

AMIT DHINGRA

AMIT DHINGRA (Querist)

04 December 2015 SIR your view is totally correct I agree with u . now my problem is that if my client some payment before possession and some after possession.

In your previous reply you consider only payments before possession.
now you consider payments after possession also.

MAIN QUERY-

WHAT WILL BE THE COST OF ACQUISION AT THE TIME OF SALE AS PER INCOME TAX PURPOSE.
I.E INDEXATION AS PER POSSESSION DATE OR AS PER INSTALMENTS DATE IN DIFFERENT years differntly

Amol S Joglekar

Amol S Joglekar (Expert)

05 December 2015 No my dear, I considered payments only before TRANSFER and after TRANSFER.

Possession may not necessarily mean TRANSFER...please have a careful look at the documents....

It is the date of transfer which is important not date of possession.

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