Capital gain tax on property

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 June 2012 I am a PIO based in London. I had invested in an underconstruction property in Mumbai in October 2007. Now the project is ready, Builder has the OC and has started giving the possession towards the end of 2011. But I have not taken possession yet. If I pay stamp duty and do registration right now but do not take the possession and then sell the flat within next 15 days, then will it fall under Long -term capital gain tax? or will it still be considered as short term since the flat is ready and Builder has started giving possession? What will be the capital gain tax rate applicable to me. Also, will the buyer need to cut TDS? If yes, at what rate?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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24 June 2012 To my view, you will be just selling the right to purchase the property, and the right can be said to be acquired by you in 2007 on the basis of Booking Agreement.
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The Capital gain, being long term, is taxable @ 20%. However, you may avail exemption U/s 54EC, by investing in NHAI, or REC Bonds and U/s 54F, by investing the sales consideration for the purchase or construction of a new residential house. The exemptions are available subject to certain conditions.
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TDS provisions will apply . TDS @20.6%

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