Capital Gain on Sale of property

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Abhay (Querist)

07 July 2009 Hi !!
I own two flats on my name and planning to sell one of the flats which is currently let out (not self occupied).

The question is -
1. If I sell this flat now (July 2009), will it be Long term capital gain?

Key dates -
Date of Agreement/Registration is June 2006
Date of payment of 80-90% amount to builder - Feb 2007 (Loan check given to builder by the bank in Feb 2007)
Date of possession is March 2008

2. If I invest the money gained by selling one of these two flats and
purchase another one with that money, would I get exemption in tax?

3. To save tax, do I need to sell self occupied house only or even sell of non-self-occupied home is also o.k.?

Please answer all these queries.

Thanks & Rgds
Abhay

Ratan Sharma

Ratan Sharma (Expert)

07 July 2009 Hi,
1. As per sec. 53A of the transfer of property act, the date of registration is important. Immovable property can not be transferred without registration . The mode of payment or the date when you have taken the possession is not relevant. Therefore as the property is purchase in june 2006 and sold in july 2009, there will be the long term capital gain.
2. If you invest the capital gain in the purchase of new residential house then you can claim the deduction u/s. 54 of the Income Tax Act.
3. No need to sell self occupied house. The treatment will be the same either you sell self occupied property or rented property.

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)

07 July 2009 I agree with Mr.Ratan's answer only to the exception that if the possession was taken in March 2008 because the property was under construction, then the date of aquisition will be that and consequently it will be short-term.

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