Capital gain on agreement to sale?

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This discussion explores whether capital gains from selling a property agreement before the final registry are considered long-term capital gains. The scenario involves purchasing an apartment, holding the agreement for two years, and then selling the agreement for a profit before the builder registers the property in the new buyer's name. The key question is whether this profit will be taxed as long-term capital gains or as something else, given the registry hasn't occurred.

divyam taparia

divyam taparia (Querist)

26 July 2024 Hello
Scenario:
If a person (say Mr A) purchases an apartment in a real estate project during launch for an amount of 10 lacs by entering into purchase agreement with the builder and holds the agreement for 2 years without doing actual registry of the property.

After 2 years (which would qualify the property as long term) Mr A sells the property to another person (Say Mr B) say for 20 lacs and the builder does actual registry of the flat in the name of Mr B.

Now will the gains of Mr A of Rs 10 lacs qualify as long term capital gain and be taxed as per new amendments at 12.5% or will it be IFOS since actual registry of the flat is not done?