Capital gains ... ..

An under-construction flat can be sold before possession by transferring contractual rights to another buyer. This is called an “assignment of allotment,” and is typically formalized through a tripartite agreement among the seller (current allottee), buyer, and builder.

Builders usually require their consent (a No Objection Certificate) before the transfer, and may charge a transfer fee. Terms of such transfers are mentioned in your Builder Buyer Agreement.

The transaction is treated as a transfer of the “right to acquire the property” until the flat is registered or possession is taken.

If sold within 24 months (two years) of allotment, gains are taxed as Short-Term Capital Gains (added to income and taxed as per slab).

If sold after 24 months, gains are treated as Long-Term Capital Gains (LTCG) and taxed at 12.50% without indexation benefits.