Capital gan tax query

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Pravar Mishra (Querist)
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11 December 2013 Dear Experts,

I bought a property (apartment) in February 2008 at Bangalore. The property is on the verge of completion now and builder is ready to provide possession and get it registered on my name.

I wish to sell the apartment now, it is still not registered under my name so apparently this process will be a transfer of ownership to the buyer.

In such a case will I be eligible for a long term capital gain tax (which can be avoided by buying a different property) or it will be considered a short term capital gain tax.

I would be grateful if you could show me the torch.

Regards
Pravar Mishra

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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11 December 2013 .
Without taking possession of the property you can not sale the property.
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Still if you sell something than for selling the same -you must possess it.
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In this case, you have got a right in 2008 to which you are selling in 2013. This right to purchase or acquire the property to which you are transferring in favour of another person , is covered under the definition of a capital asset.
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LTCG will arise in such a case. Residential property can be purchased by investing the Sales Consideration. Refer Section 54F.
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Pravar Mishra

Pravar Mishra (Querist)
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11 December 2013 Thanks Paras, appreciate your help.

Pravar Mishra

Pravar Mishra (Querist)
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11 December 2013 Dear Paras,
In one of the forums I read as stated below

"If the Property is being constructed and the payment is made in installments,

Then there will be proportionate capital gain of Short term and Long term on installments basis..."

Will the schedule of payment to builder decide the extent of long term / Short term capital gain applicable in my case ?

Seek your advice.

Regards
Pravar

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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11 December 2013 Dear Pravar,
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One asset can not result into two types of capital gains. May the forum be discussing the issue on different type of facts.
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In your case only and only LTCG is to be computed.
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Indexed Cost of Acquisition (ICA) towhich you have to deduct from the sales consideration, for arriving LTCG can be computed on yearly (installments paid)basis.
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You can refer the table of Cost Inflation Index, which you can easily get on net.
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