I had booked a Flat from a builder in March 2010 which was confirmed by the builder through an allotment letter dated March 2010. The Flat is under construction till date and I have not taken possession of the same. 80% payment has been made at various stages of construction to the builder. Now, I intend to sell the flat to a third person and want to invest in a new residential flat. Will the gain in sale of flat be considered as capital gain (long / short) and whether the same shall be taxable if I invest the same in a new residential flat?
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Tax exemption in sale of an under-construction flat
Replies (2)
It shall be long term capital gain because allotment letter is dated March 2010 - beyond 3 years.
You will need to enter into agreement between you, the buyer and the developer.
The capital gain from the sale of property can be invested in another property for which exemption u/s 54 shall be available.
I completely agree with Mr. Mihir.
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