Capital gains builder property

What is the question ??????????????

Computation of long term capital gains arises or not

@ Anil Kumar Khetan

Provide full details:-

What is the property?

Who is original owner?

What agreement between owner and builder?

What property was received by your son from the builder, and later transferred back to the builder against payment?

The dates of all the transactions.

Once you provide all this information, you may get answer from someone knowledgeable in this forum.

If you do not wish to disclose all the details in this public forum, then best for you to consult some CA in private. That could cost you some amount. 

Apartment agreement with under construction property 2005 

Payment on different dates by my son . Property construction not completed as yet . But my son right to property acquired transfer at present with amount already paid and some additional money . In this circumstances any long term capital gains arises. Please any suitable advice by any person. Thanks advance.

@ Anil Kumar Khetan

There is no property registered in your son's name as yet with the Govt Registration Authorities.

What you are mentioning is only an agreement between your son and the builder.

And your son is transferring that agreement to another party against payments.

How those payments have been made, the mode, and the reason shown?

Since there is no registration deed for the property, I do not think it is possible to show any sale and the consequential Capital Gain.

How the transactions made by your son is to be shown to Govt can only be answered when you provide more details about mode and purpose  of the agreement transfer and how that transfer has been made legally binding.

The tax treatment of booking rights (the right to purchase a property, typically held in under-construction properties) under the Income Tax Act in India is as follows:

Booking Rights as Capital Asset:

Booking rights are considered a capital asset since they represent the right to acquire an immovable property.

Capital Gains Tax Applicability:

When booking rights are transferred or sold to another party, the gains arising from this transfer are taxable as capital gains.

Timing of Transfer:

The transfer is recognized for tax purposes when the right is actually transferred or extinguished, often contingent on receiving the builder’s consent or fulfillment of conditions.

Merely paying an advance or signing a preliminary agreement does not constitute a taxable transfer.

Transfer is recognized when the buyer has full rights, including builder approval and payment completion.

Holding Period:

The holding period for booking rights begins from the date the rights are acquired (usually when an agreement is signed).

If held for more than 36 months, gains qualify as long-term capital gains (LTCG).

Otherwise, gains are short-term capital gains (STCG).

Tax Rates:

STCG is taxed as per the individual’s income tax slab rates.

LTCG from property is taxed at 20% with indexation benefits.

Exemption Benefits:

Exemptions under Sections 54 and 54F can be claimed if the capital gains are invested in purchasing or constructing a residential property within prescribed time limits.

Important Rulings:

ITAT rulings have clarified that booking rights transfer is taxable only upon actual transfer, preventing premature taxation.

In essence, booking rights are treated as capital assets, and capital gains tax applies when these rights are sold or transferred with full ownership rights, sub

ject to exemptions if applicable.

Please  clarify the position 

@ Anil Kumar Khetan

Are bapre  :)

You are my Guru on this subject.

You have given the answer to your query yourself and can do the needful.

All the best.