Long term capital gains
This query is : Resolved
18 April 2017
1. For an apartment bought from a builder with payment in instalments, when does the apartment become a capital asset. I have been told it becomes one from the date of issue of the allotment letter by the builder, and the period for it to become a long term capital asset is calculated from this date.
Is this correct?
2. If so, how is the indexed cost calculated? The instalments are paid over a long period of time.
Please advise in detail
Thank you
R Chadha
Is this correct?
2. If so, how is the indexed cost calculated? The instalments are paid over a long period of time.
Please advise in detail
Thank you
R Chadha
18 April 2017
Normally when an apartment is booked with a builder, then it remains as advance only till the property is fully constructed. Once it has been completed and is fit for possession then it becomes a capital asset. Before that it remains as advance.
You can show the period of holding from the date of allotment but this is debatable and subject to litigation.
You can show the period of holding from the date of allotment but this is debatable and subject to litigation.
18 April 2017
Thank you for the prompt reply. Are you aware of any CBDT circulars / directives on the subject?
R Chadha
R Chadha
CA R SEETHARAMAN
(Expert)
19 April 2017
Yes it'scorrect to calculate from date of allotment. Does not matter for instalment payment index calculate from date of allotment.
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