Pagdi Room Deposit can be taken as Initial Payment while selling this Room ?

Hi,

My query is one of my client's Mother-in-Law has acquired a Pagdi Room by paying 3 months Rent as Deposit on 01/07/1991 by paying Rs. 378 in Dombivali.

On 13.12.2022 by No Objection Certificate signed by Mother-in-Law in the name of Daughter-in-Law (my client) given full rights in this Room. 

Subsequently, on 23.12.2022 this room by Sale Agreement converted into Ownership Room by Agreement Value Rs.450000 + Stamp Duty Rs.103400 + Registration Charges Rs. 14770.

Further, this ownership flat was sold by Sale Agreement dated 10.12.2024 by Agreement Value of Rs.22,21,000.

Further, on 06.11.2024, another Flat was purchased from this money jointly with Husand for Rs. 40,00,000 + Stamp Duty Rs.2,80,000 + Registration Charges of Rs. 30,000.

As per Income Tax Act, there should holding period of 2 Years to consider this gain as Long Term Capital Gain.

My query is whether holding date can be considered as Pagdi Deposit was paid on Year 1991 ?

All are requested to give view on this issue.

Thanks in advance.

 

Replies (1)

Holding date: The holding period for LTCG purposes likely starts from the date of conversion to ownership (2022), not the initial Pagdi deposit in 1991.

LTCG Eligibility: Given the sale occurred in 2024, within 2 years of conversion to ownership (2022), the gain may be considered Short Term Capital Gain.

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