How to treat Earnest money (token) received on sale of share in flat in a given FY for tax purpose?

Nirmala Gaunekar (1 Points)

10 June 2024  
  1. My mother owned a flat in Mumbai. After her death, it was transferred to the names of my siblings and myself in August 2010 via proper mutation at the back of the share certificate as usual.
  2. A couple of years ago (in 2022), the housing society approved RE-DEVELOPMENT which is expected to be completed later this year (2024). Builder will be giving a new flat to us siblings.
  3. On my elder sister’s request, I have decided to sell to her, my share in the NEW FLAT for a total consideration of 70 lakhs, after re-development is complete.
  4. We have NOT yet made any formal agreement / MOU / sale deed etc.
  5. To show her earnestness in wishing to buy my share in the flat, my elder sister paid me Rs. 5 Lakhs as EARNEST MONEY (token money) in January 2024. She plans to pay the remainder after the flat is completed.
  1. Can I carry forward this Rs. 5 lakhs token money to be accounted for tax purpose, in a future FY (most likely FY 2024-25)? (when the sale is expected to be made and formalized via a conveyance deed).
  2. Otherwise what would be the appropriate calculation of (deemed?) Long Term Capital Gains on the related to EARNEST MONEY of Rs. 5 Lakhs received in FY2023-24? (although formal sale of asset has not yet occurred)
  3. Any other appropriate advice would be greatly appreciated. Thanks!