Resale of flat and tax implications

Tax queries 590 views 4 replies

GVSRaju

Tech Lead

29 Points Posted on 09 December 2013

Hi all,

I have booked Under construction flat on January 2011 and Homeloan from LIC got approved by 30th January and first Installment released in April 2011. After completion of constuction I have occupied the flat in August 2012 after paying all the dues to builder.

Now I am thinking to sale the flat, before doing that I would like to know ..

1. Is the resale falls under longterm or short term capital gain ?

2. How much tax I need to pay ( I fall under 30% Tax category )

3. If I invest the the rest of the amount after closing my existing homeloan , still I need to pay the tax ? what are the other implications or issues ?.

Please throw some light on this.

Thanks and Regards,

Raju

Replies (4)

Ashok

Industry

416 Points Posted on 09 December 2013

Even if you had registered the flat on April 2011 (which i doubt would have happened), three years has not elapsed from that date to qualify into long term capital gains. The capital gains (if any) is short term in nature and will be added to your income and charged at normal slab rates.

If you have claimed 80C (1 lac limit) deduction for your principal payments then property transferred within 5 years from the date of possession will disqualify those deductions. Those deductions will be liable to tax in the years you claimed those deductions.

Deduction for reinvestment in another house property is available only in the case of long term capital gains, not short term capital gains.