Capital Gain on Sale of Flat

Tax queries 341 views 1 replies
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Accountant
73 Points Joined April 2012

I had Sold the Residential Flat which was under construction, what will be tax implication whether LTCG or STCG?

Dt of Agreement : 14.08.2019

Dt of Possession : 04.08.2023

Cost of Purchase : 1.40 Crore

Dt of Sale : 02.01.2025

Sale Price : 1.55 Crore

Whether Gain of Rs 15 Lakh is liable for STCG or LTCG

 

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On 27 February 2025 at 12:46 Report
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Master in Accounts & high court Advocate
9447 Points Joined December 2011

To determine the tax implications, let's break down the information: Key Dates and Figures - *Date of Agreement*: August 14, 2019 - *Date of Possession*: August 4, 2023 - *Cost of Purchase*: ₹1.40 Crore - *Date of Sale*: January 2, 2025 - *Sale Price*: ₹1.55 Crore - *Gain*: ₹15 Lakh Holding Period and Tax Implications - *Holding Period*: The holding period is calculated from the date of agreement (August 14, 2019) to the date of sale (January 2, 2025), which is approximately 5 years and 4 months. - *Tax Implication*: Since the holding period is more than 24 months (2 years), the gain of ₹15 Lakh is liable for *Long-Term Capital Gains (LTCG)* tax. LTCG Tax Calculation - *LTCG*: ₹15 Lakh - *Tax Rate*: 20% (with indexation benefits) - *Indexed Cost of Acquisition*: Calculate the indexed cost of acquisition using the Cost Inflation Index (CII) notified by the government. Consult a tax professional to accurately calculate the indexed cost of acquisition and LTCG tax liability. Additional Considerations - *Under-Construction Property Tax Benefits*: As per Section 24B of the Income Tax Act, 1961, you can claim tax benefits on the interest paid during the pre-construction period. However, this benefit is available only after you've taken possession of the property. - *Capital Gains Exemption*: If you invest the gains from the sale of the flat in another residential property or certain specified assets, you may be eligible for capital gains exemption under Section 54 or Section 54F of the Income Tax Act, 1961. Please consult a tax professional or financial advisor to ensure accurate calculations and to explore potential tax benefits.

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On 27 February 2025 at 13:04


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