Flat sale on monthly instalment basis

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2014 Hello all,

I am planning to sell a flat and I have a friend who is willing to buy it. He is paying some down payment and needs to get a bank loan for 75% amount.

Rather than involving a bank, I am fine if he can repay me directly by paying out monthly installments, equal to EMI over a longer duration.

Can this be done ? Can we have an agreement to achieve this ? And, does this have any tax implication for me as a seller ?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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26 June 2014 you can decide whatever payment schedule you prefer. but the capital gains shall accrue as and when the possession is handed over the friend irrespective of when you receive the consideration

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

28 June 2014 In the scenario above, suppose following is the sequence of events -

1) Original Possession of the flat has been taken by the seller(me) just recently.

2)Now both parties enter into agreement to sale, say today.

3) Possession is given after 3 years, to the friend to avoid short term capital gains

4) Sale deed is done after 3 years at the time of possession with some initial down payment and installments spread over 10 years ( from year 4th to 10th )

In this scenario, what is the tax treatment on the instalments received each year ??

And what would be the circle rate applicable ?

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