Urgent criteria for treatment of long term asset

Save Share

This query is : Resolved

CA Nikhil Jhanwar (Querist)

09 January 2012 Army has alloted a residential house in 2004, payment was made in instalments upto 2007, possession letter was received in 2009 ( 3 years not completed as on date)

My query is for purpose of long term capital asset, what will be the date of purchse for treating asset as long term asset for capital gain calculation.

That is period of 3 years will be calculated from which year?

Its urgent

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

09 January 2012 In the present law we have to see Possession or registration. ICAI has recently recommended in its memorandum on Direct Taxes 2012, to treat allotment date or a date when 50% of the payments are paid.
From 2009, 3 years period has to be calculated.
.

CA Nikhil Jhanwar

CA Nikhil Jhanwar (Querist)

09 January 2012 Thanks Sir, But whether circular 471 or 672 doesn't apply to it ?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

09 January 2012 I have gone through Circular 471.
Cicular 472, may also be referred by you which is pasted below -The Board has considered the matter and has decided that if the terms of the schemes of allotment and construction of flats/houses by the co-operative societies or other institutions are similar to those mentioned in para 2 of Board's Circular No. 471, dated 15-10-1986 (Sl. No. 428), such cases may also be treated as cases of construction for the purposes of sections 54 and 54F of the Income-tax Act.

.
It remains to be decided, whether the scheme for army personnel matches with the DDA's Scheme.
.
Looking towards the reference of Section 54, 54F, the circular is for limited purpose so as to guide us, whether the allotment is purchase or construction.
.

CA Nikhil Jhanwar

CA Nikhil Jhanwar (Querist)

09 January 2012 Allotment is for construction

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now