CAPITAL GAIN

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SHAILESH SANGANI (Querist)
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26 April 2010 Differential amount received on account of sale of flat before taking actual possession (Rs.5 Lacs were paid as an advance and agreement was entered with the builder, now the said flat is sold for Rs.10 Lacs to new buyer.)

We want to know whether the differential amount will be treated as capital gain or not, as property was sold out within 1 and half year without taking actual possession of the property.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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26 April 2010 This is a 'right in a property' and its transfer attracts capital gains tax.

taxindiaconnect

taxindiaconnect (Expert)
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26 April 2010 Even if this not treated as capital gain which is short term in nature, it will be income from other source taxable at the normal tax rate. However I am just giving a new perspective, though I fully agree with BC.

SHAILESH SANGANI

SHAILESH SANGANI (Querist)
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26 April 2010 I belive this is a Short term capital gain and shall call upon the client to pay the same.

Thanks for your prompt response.

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