Capital gains

Tax queries 371 views 3 replies

karthik

Student CA Final

43 Points Posted on 11 March 2014

Hi all,

A Residential Property has been sold and consideration received in various installments. Total Consideration is Rs.22 Lakhs out of this 15 Lakhs has been received during FY 2012-13. and only Rs. 7 Lakhs has been received in FY 2013-14. Absolute Sale Deed has been executed on last installment only ie July 2013 (FY 2013 -14). Kindly let me know, whether transfer of residential property has to be shown in FY 2012 -13 or FY 2013 - 14.

As per my assessment, Sale deed is of no relevance, when the substantial payment is received in FY 2012 -13, transfer has to be booked in FY 2012 -13 only, eventhough the final settlement is done in FY 2013 -14. Kindly confirm.

For claiming exemption, the consideration has been invested in purchase of flat for Rs. 24.96 Lakhs. The Flat has been alloted during Oct 2012 and Part consideration of Rs. 15.12 Lakhs paid in FY 2012 -13 (in 3 installments) and another part consideration of Rs. 9.84 Lakhs paid in FY 2013 -14.

Construction is still under progress.

Kindly confirm, Whether i could take full value of consideration in FY 2012 - 13 Rs. 22L and Full value of purchase Rs.24. 96 Lakhs for exemption. Kindly let me know, what proportion shall i take for FY 2012 -13 and FY 2013 - 14

Thanks in advance

Replies (3)

Arpit Pachisia

734 Points Posted on 12 March 2014

Hello Karthik,

In case where a residential house is sold, always consider the first instalment of payment for assessing A.Y. As in the case, 15L has been received during F.Y 2012-13. So you will consider the whole amount of sale i.e. Rs 22L as consideration amount for F.Y. 2012-13 only.

And yes you can claim full amount of Rs. 24.96L as value of your purchase of any other house while claiming exemption from the LTCG/STCG.

Thanking You

karthik

Student CA Final

43 Points Posted on 12 March 2014

Thanks Arpit,

My doubt is the new flat is under construction only. However the amount for the property has been fully paid for that flat. Is it possible to claim the full amount. Will it give chance to disallow the exemption now availed, if at all the construction is not over within 3 year.

What will be the deciding factor for claiming exemption u/s 54

1. Allotment of Flat (or)

2. Substantial payment of purchase value of the flat (or)

3. Competing of construction within 3 years.

Thanks in advance.

karthik

Student CA Final

43 Points Posted on 12 March 2014

Thanks a lot guys, for your valuable answer and time involved

1. Where the capital asset is sold, and first installment is received, then itself the transfer is complete. Collection of full value of consideration within the current year is irrelevant. We can claim proposed / agreed full value of consideration as Transfer of Capital Asset in the year in which first installment is received.

2. Allotment of Flat is the deciding factor, for claiming exemption as Purchase or Construction of Residential Unit.

In my case, both the events are held during the FY 2012-13. Hence Capital Gains could be calculated on full value.

Thanks and Regards,

Karthikeyan Jayasankar