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Sale of flat of booking advance

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Querist : Anonymous

Querist : Anonymous (Querist)

03 July 2013 Dear Expert,

My client had given Rs.10,00,000/- as advance booking amount towards flat. However after 10 months he decided not to buy that flat and asked for refund of money back from builder. Builder has refunded back a sum of Rs.11,50,000/-. My quarry is whether the extra amount received to be considered under short term capital gain (sale of right to buy flat)OR Under income from other sources (Interest on account of 10 months advance booking).

Thanks & Regards,
CA. Rajesh Shah

CA UMESH DULAL

CA UMESH DULAL (Expert)

04 July 2013 He has renounced the right to purchase of the flat for which received consideration which is above the initial subscription amount.

Since he has booked the flat (not apply for allotment and the money was refunded due to non allotment)and right to purchase the flat has been raised due to agreement and renouncing the right is to be treated as transfer.

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