My wife sold a residential plot in February 2010 (AY 2010-11) on full consideration of Rs. 21.00 Lakh approx. (LTCG was Rs. 20.43 lakh). In AY 2010-11 itself i.e. March 2010, she applied for a residential flat with a reputed builder at a total cost of Rs. 49.00 lakh approx. with 50% down payment and rest in instalments. Rs. 24.50 lakh including full consideration of Rs. 21.00 lakh was used for making down payment. Instalments upto 95% of total cost i.e. Rs. 45.00 lakh approx were paid till 2016, when the construction by builder stopped altogether. Technically, the flat is still under construction. Now even after 16 years, since the flat is undeliverable, we want to sell this u/c flat and expected sale price is Rs. 60.00 lakh approx.
How the taxation/LTCG on this sale to be handled? Whether LTCG is Rs. 60-45= 15 lakh or earlier LTCG is also to be added making total of Rs. 35.43 lakh? Whether any penalty will have to be paid...though not through any fault of ours? Guidance is solicited on the matter. Thanks in anticipation.
CAclubindia
