LTCG ON PROPERTY SOLD IN PARTS

I sold a piece of land and buyer got that piece of land registered in four registrations over two years period and paid accordingly in four instalments -now I want to invest that money in buying a residential property to avail LTGG benefit under Section 54-pls advise if my two years time period to purchase a new residential property starts from the date of last registration when the last payment was made and whole trasanction for sale of land completed?

Replies (3)
Quick Summary
This discussion addresses Capital Gains Tax (CGT) implications when selling a property in multiple parts over time. The key question is whether the two-year period for investing in a new residential property to claim Long Term Capital Gains (LTCG) tax benefits starts from the first or last registration date. The advice suggests that if the property was originally a single entity registered in your name, the sale is treated as one transaction, and the two-year window begins from the date of the first registration.

@ Ravinder Nanda

If each piece of property [registered separately by the buyer] was originally owned + registered in your name as a separate piece of property, then only LTCG or STCG[as applicable] would be considered individually for each piece of the property sold.

Otherwise, the whole deal would be considered as a single sale with the date of sale considered as the registration date of the first piece by the buyer.

And the zero or reduced LTCG benefit would be available only on one piece of property, not on all four.

So you will have to do your own calculations to find out which piece of property sold would be most advantageous to be used for using against purchase of a new property.

Many thanks for your reply-Pls also advise suppose it was originally one registry only in my name but buyer buys the land through two registries as he wants to make payment in parts then would I be entitled to reduced or zero LTCG for whole trasanction and from which date my window of two years for purchase of new residential property start-from date of first registry or from date of last registry-Regards

@ Ravinder

I am not a CA or a tax expert, but a novice, trying to learn swimming the turbulent taxation maze of India. So following views of mine should be looked at by the many Indian Taxation Experts in the forum and corrected if needed.

The scenario you mentioned now, would mean a single property sale, effective the date of registry of the first parcel.

And, the LTCG would need to be calculated for the whole property as a total.

And the 2 year window for setting off this LTCG against your subsequent purchase of another property would commence from date of the first registration.

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