Advance tax in case of ltcg on sale of residential property

Dear Friends,

I have a client who is transferring residential house property where long term capital gain comes to Rs. 2,00,00,000/-.

The sales deed will be done in Apr'15 (corrected: typo error showed it as Apr'14) and full consideration will be received then.

However, an MOU with the transferee will be signed in Dec'14 and only token amount of Rs. 5,00,000 /- will be received.

My question is this:

1. Is advance tax due to be paid in Dec'14 (60%) & Mar'14 (100%) quarters ?  Client is non-corporate assessee. 

2. Which year's indexation can be availed? FY 13-14 or FY 14-15? Sales deed will be in Apr'15.

3. Are society transfer charges deductible like brokerage as expenses in relation to transfer?

Will appreciate the help. Thanks.

  

 

Replies (2)

Hi Varun,

If I am not mistaken the sale deed is going to be executed in April 15 instead of April 14 as written by you. If it is the case then my answer to your query is hereinbelow:

Capital gain on transfer of property arises when possession of property is transferred to the buyer so it would be taxable in assessment year 2016-17 instead of 2015-16.

Pertaining to advance tax on LTCG I would like to clarify you that advance tax is payable in the subsequent installments after arising of the capital gain.

In case further clarification is needed you can contact me at 9015980399

Originally posted by : CA Kanj Goel
Hi Varun,

If I am not mistaken the sale deed is going to be executed in April 15 instead of April 14 as written by you. If it is the case then my answer to your query is hereinbelow:

Capital gain on transfer of property arises when possession of property is transferred to the buyer so it would be taxable in assessment year 2016-17 instead of 2015-16.

Pertaining to advance tax on LTCG I would like to clarify you that advance tax is payable in the subsequent installments after arising of the capital gain.

In case further clarification is needed you can contact me at 9015980399

Hey Thanks a lot for the prompt reply! Yes, I did mean Apr'15 (I have corrected the original post now). 

Can you guide me to the section number / court judgement where this stand is taken ? 

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