Capital gain exemption

Tax planning 601 views 6 replies

Rajeev Garg

DOF

71 Points Joined December 2009

Hi Experts,

I booked a residential apartment during pre-launch in a Gurgaon in May 2008. I paid 95% until April 2012 but still waiting for the poseession. Finally I sold the apartment to an individual in December 2012 (received part payments during September, October, November and final payment in December) and made a capital again around INR 17 lacs (without indexation). It is to be noted that buyer did not deduct any TDS.

My first quesiton is : Does it consider to be LTCG being over 3 years of booking? If so will the indexation apply?

I have booked another apartment in Greater Noida in September and paid around INR 5.05 lacs and INR 17.14 lacs in December 2012.

My second question is : How to show this in ITR? Do I need to apply for tax exemption to my ITO under section 54?

My understanding was not to show anywhere if it is a LTGC as I have invested in CG within 6 months in another project before the end of Assessment year.

Please guide me. I do file my own tax returns and I am an NRI.

Replies (6)

CA Neil Ganatra

Partner - Gautam Joshi & Co.

871 Points Joined February 2009

Dear Mr. Rajeev,

It will be considered as LTCG and you can claim exemption u/s 54 in the return for the F.Y. 2012-13.

Rajeev Garg

DOF

71 Points Joined December 2009

Thanks Neil. Noted I will go thru ITR format to see where to show the LTCG and claim 100% exemption. So it is clear if the apartment is not delivered for possession after 3 year and if one sells it it becomes LTCG.

Rishi

Others

22 Points Joined January 2013

Isnt the LTCG calculated from possesion rather than registration date.?

CA Neil Ganatra

Partner - Gautam Joshi & Co.

871 Points Joined February 2009

In case the registration is not done i.e. no paperwork formality has been done then in that case possession is considered as transfer and in such case it will be relevant date.

Rishi

Others

22 Points Joined January 2013

I had bought a underconsrtruction property and had completed the registration, but got the possession after 3 years of registration. I then sold the property one year after possession, what will be my tax liability then.

Rajeev Garg

DOF

71 Points Joined December 2009

well in my case only 95% payment is paid. i only received the possession e-mail after the transfer completed. I am taking my case as LTCG let ITO decide what he feels. In any case i invested my entire capital gain into new property.