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Treatment of Capital Gain Tax when spread over 2 financial years

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Sheikh Zubair

Project Engineer

30 Points Posted on 16 July 2023

Hi.

I had agreed to sell a piece of land that i had held for more than 3 years in FY 22-23. I received around 70% of the payment before march 31 and some of the payment is still due which would be made during current FY. I want to know how to to file the return for previous FY with regard to the 70% payment that i had received. The ownership of the land is yet to be transferred.

Replies (3)

Quick Summary

This discussion clarifies the treatment of Capital Gains Tax when a land sale payment is split across two financial years. Generally, the entire gain is taxed in the year the sale is completed, not when partial payments are received. If the sale agreement isn't registered or possession isn't transferred within the financial year, payments received are often treated as an advance, with the full tax liability arising in the year the transfer is finalised.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

212511 Points Posted on 16 July 2023

If the agreement is not registered or possession is not given in FY 2022-23, in that case 70% amount is been treated as advance in the year. You cannot sale land in two parts. Your deal will be considered for FY 2023-24 when the transfer of WHOLE land will get completed.