Income tax for flat resale

First on the issue of 3 year threshold.

As far as the undivided share in the land is concerned, the 3 year would be counted from the date of registration of the share of land in your favor. As regards the building, the 3years can be recokoned only after the buidling is fully complete and handed over to you. In some states this difference is not there now as even if there is building agreement, the entire flat ( land+Building) has to be registered i s come cases.

In any case the 3 years has to be recokned from the date of legal ownership.

But your info that no tax is leviable on the appreciation is wrong. If the property is more that 3 years old, the benefit of indexation ( i.e the natural appreciation due to price rise etc) is given. If you still make profit on sale you are taxed no doubt.

No, tax on profit from sale of flat is there. If you sell a flat after 3 years from buying the flat, you may avail indexation while computing capital gain (profit), which will be taxed at 20%. However, if you invest in another property the capital gain (profit) that you have earned, then you get deduction, which means you shall not have pay tax. If you are planning to sell your flat, which is still under-construction, you may consult a CA, who will draw a proper plan of action to save tax, before you sell it.

thanks a lot to both of you

Originally posted by : Mihir
	No, tax on profit from sale of flat is there. If you sell a flat after 3 years from buying the flat, you may avail indexation while computing capital gain (profit), which will be taxed at 20%. However, if you invest in another property the capital gain (profit) that you have earned, then you get deduction, which means you shall not have pay tax. If you are planning to sell your flat, which is still under-construction, you may consult a CA, who will draw a proper plan of action to save tax, before you sell it.

Thanks for your reply.

Will there be any tax exemption if i sell the flat before 3 years and buy another one?

No capital gain exemption will be cancelled then as per under section 54