Capital gain on sale of flat received under development

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Gaurav Bakare (Querist)
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18 July 2016 Mr A Purchased Flat of 400 Sq Ft under society before 1981, He along with society entered into Agreement for development on 21/04/2010 and received new Flat on 22/10/2013 with extra 100 Sq Ft. Total Sq Ft area of Flat Received 400+100 = 500 Sq Ft. On 22/10/2013 he paid Rs 50000 toward stamp duty for taking position of Flat. New Flat was sold on 17/05/2015
How to Tax the same.
Short Term or Long Term
If Yes How?

Amol S Joglekar

Amol S Joglekar (Expert)
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18 July 2016 01. capital gain on transfer of 400 sq ft flat must have been made exempt with the investment of 500 sq ft flat,though in the same premises. (This is called as new asset)
02. and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be nil;

Gaurav Bakare

Gaurav Bakare (Querist)
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18 July 2016 Than you for the Answer But..
Return for 13-14 was not filed and Exemption u/s 54 was not claimed in that year. How to deal with it.
Also Develop right had been given in 2010, One of the case law suggesting its transfer in 2010. But no sale consideration was received at that time.
As per section 54 if new asset transfer within 3 years it should taxable as STCG and cost to be taken by reducing cost of Acqn.
As it treated Transfer in 2013 so have to determine cost of sale of Property and reduce cost from the same for 2015.

Amol S Joglekar

Amol S Joglekar (Expert)
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18 July 2016 cost is NIL since you are selling the new asset within 3 years of its purchase (Read section 54)

And please, dont say you have not claimed the exemption....The department will issue notice to you to pay the capital gain tax along with interest on the transfer of old asset (400 square feet) which you bought before 1981.

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