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STCG or LTCG for sale of flat, how to plan for tax

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Sandyg

Service

32 Points Posted on 14 August 2023

We (Father, Me & my wife) bought an under construction property (flat) in Mumbai Suburb, registered it in Sep 2021 and possession in Oct 2022. Now we are planning to sell the flat for buying a new house. Could you let me know 1) If registration date or possession date is considered while computation of tax?

2) Will I be able to do the following - Considering, if I qualify for LTCG by coming October 2023 (based on registration date), after which I park full proceeding (along with capital gain) towards new property purchase

3) Any tax implication on 3 of us from above proceedings - Father (major contributor 75%), we both( joint home loan 25%)

Thank in Advance!

Replies (2)

Quick Summary

This discussion covers tax planning for selling a jointly owned flat. It clarifies that the holding period for tax purposes starts from the registration or allotment date, not the possession date. The advice suggests that if the flat is held for over 24 months, it qualifies for Long Term Capital Gains (LTCG) tax. It also touches upon Section 54 exemptions for reinvesting proceeds into a new property and notes that tax implications are calculated individually based on ownership share.

sabyasachi mukherjee

Profession

19978 Points Posted on 14 August 2023

1) registration date considered
2)SEC 54 exemption
3) no tax implication provided if you do not invest the proceeds in house property.
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Aashok Kumar Sharma

Finance/Compliance Consultant

75663 Points Posted on 08 November 2026

Under-construction flat registered later:
• The holding period for a flat bought from a builder runs from the date of allotment or agreement (if it gave substantial rights), not the possession date (Circular 471/1986, 672/1993 and tribunals).
• If held more than 24 months from allotment, LTCG. For three co-owners, each computes on their share.
• Indexation (sale after 23 July 2024, resident individuals): the lower of 12.5% without indexation and 20% with indexation, indexing each instalment from its year of payment.
• Sec 54 for each co-owner if reinvesting.