Capital gains

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Querist : Anonymous

Querist : Anonymous (Querist)

14 June 2014 MR X HAS PURCHASED A HOUSE 3 YEARS BACK FOR 1CR. HE PAID Rs 30 LAKHS AS ADVANCE AND GOT REGISTERED AGREEMENT.OVER A PERIOD OF THREE YEARS HE PAID Rs 60 LAKHS. HE WILL GET THE POSSESSION OF HOUSE TODAY IF HE PAYS REMAINING 10 LAKHS.HE WANT TO SALE THIS HOUSE TODAY, WILL THIS PROPERTY BE CONSIDERED AS LONG TERM CAPITAL GAIN AND WHETHER HIS ELIGIBLE FOR SECT 54 OR 54 F DEDUCTION.

Amol S Joglekar

Amol S Joglekar (Expert)

14 June 2014 No. It is short term capital gain......

Querist : Anonymous

Querist : Anonymous (Querist)

14 June 2014 THE REGISTERED AGREEMENT OF BOOKING IS MORE THAN 36 MONTHS AGO.WILL IT NOT BE A LONG TERM CAPITAL ASSET AND SUBSEQUENT PAYMENT OF 60 LAKHS COST OF IMPROVEMENT

Amol S Joglekar

Amol S Joglekar (Expert)

14 June 2014 it is only AGREEMENT... agreeing to do something in future. The capital asset became the property on a later date

Querist : Anonymous

Querist : Anonymous (Querist)

14 June 2014 AS THE AGREEMENT IS A REGISTERED AGREEMENT THE SAME IS OFFERED AS MORTGAGE TO BANK AS SECURITY AND IS ENFORCEABLE IN LAW. HENCE IN MY OPINION IT IS A VALUABLE PROPERTY AS IT GIVES ME CERTAIN ENFORCEABLE RIGHTS IN THE PROPERTY.HENCE CLARIFICATION IS REQUIRED WHETHER IT IS A LONG TERM CAPITAL ASSET.

Amol S Joglekar

Amol S Joglekar (Expert)

14 June 2014 No my dear, that is not the case..... Ok let us go and dig it further..... At the most what you can argue is the "right to own an immovable property" is acquired through that registered agreement. Now right of any sort in relation to immovable property is also capital asset. A very carefully drafted sale transaction should also mention that what you are selling is the "right" and not the flat or immovable property......(Again in that case 54 would not be available because what you r selling is a "right" and not residential property.... COMPLICATED hmmmm? Your views please

Querist : Anonymous

Querist : Anonymous (Querist)

14 June 2014 I WOULD BE ENTERING INTO AN ASSIGNMENT DEED FOR SALE OF MY RIGHTS ACQUIRED AS PER THE REGISTERED AGREEMENT.I DO NOT INTEND TO CLAIM 54, BUT CAN I NOT CLAIM 54 F?

Nikhil Kaushik

Nikhil Kaushik (Expert)

16 June 2014 once you take the possession, you will have to restart counting of holding period. the only way to claim exemption is to sell before possession. however, exemption shall be made available under section54F instead of 54.

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