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Query of capital gain

chetan (accountant) (321 Points)

20 August 2012

Hi frined

Please advise me that which date should be consider while computing capital gain (i.e possession date or agreement date)

Awaiting for reply.

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8 Replies

CA Ashish Pathak (Employed at Cipla Ltd.) (2779 Points)
Replied 21 August 2012

Possession date should be considered in my opinion. There is a similar decided case where it was held that date registration of property is not to be considered for computing capital gains. What is relevant is date of transfer of possession. I dont remember the exact name of this case. I will look for it and will let you know as soon as i get it. Regards.

shyam sundar (Article Assisstant) (183 Points)
Replied 21 August 2012

it is possession date, an agreement is only an first step to an contract there are chances it can be breached.

so its always a possssion date rather than agreement date. Sec58 of Immovable properties act also speicifes only about possession and not about date of agreement.

Anand Raghavendra (Manager-Internal Audit) (111 Points)
Replied 21 August 2012

I think it would be the actual transfer of ownership

saroj (Trainee) (29 Points)
Replied 21 August 2012

Originally posted by : chetan

Hi frined

Please advise me that which date should be consider while computing capital gain (i.e possession date or agreement date)

Awaiting for reply.

It's possession date only

Jasmeet Singh (Audit Senior) (911 Points)
Replied 21 August 2012

As per section 2(47) Possession date will be considered for calculating Capital Gains.

Arijit Bhattacharjee (ACA, M.COM) (407 Points)
Replied 21 August 2012

Dear Chetan ji,

your query is a pretty old issue confronted by the parliament while legislating the act. Hence, there is no doubts cast as of now on this matter.

Section 2, clause 47 and further sub clause (v) reads as under:

"ANY TRANSACTION INVOLVING THE ALLOWING OF THE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882); OR...."

Thus section 53A of TPA'1882 which deals with possession, makes it amply clear that the transfer of

possession date shall be taken into consideration and not "agreement" date.

Cheers

chetan (accountant) (321 Points)
Replied 22 August 2012

Thanks for your reply

In capital gain of house property if there is any addition (i.e Tv.,furniture,refg.geezer,etc) amount to Rs 150000/-. in such case i get deduction of these in computing capital gain.

Flat sold as it is.

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 22 August 2012

@ chetan

no , these are just personal effects and can not be added to property value, irrespective of fact that these belong with property in sale agreement or not.