Year of taxability of capital gains

Tax queries 203 views 5 replies

Guest

Hi All,

We entered into agreement to sell our residential building during February 2020 aiming to complete all the formalities including registration during late March 2020. The buyer released 60% of the total consideration before 31st March 2020 hoping that registration can be completed before March. But due to Covid-19, the registration could not be done till date and the 60% of the payment is still with us. The 40% payment will be made during registration only. I want to know the year of taxability of capital gains.. since during FY 19-20, we have received 60% of the total consideration. Also could you please advise, whether any deposit into CG account scheme has to be made before this July to become eligible for exemption?.

Appreciate for reading my query. If there is any other point which you would like to highlight, please let me know. Thanks in advance

Replies (5)

CA ABHAY GUPTA

Practice

3235 Points Joined August 2009

Any profit or gain arising from transfer of capital asset held as investments are chargeable to tax under the head capital gains

Profits or gains arising in the previous year in which the transfer took place shall be considered as income of the previous year and chargeable to income tax under the head Capital Gains and the concept of indexation shall apply, if applicable.

Transfer is defined as the sale of the asset, giving up of rights on the asset, forceful takeover by law or maturity of the asset.

since in your case possession is not given even consideration received thus FY 19-20 will not considered as year for purpose of capital gain...

this my personal view other view are also welcome..

sabyasachi mukherjee

28032 Points Joined May 2017

My opinion.

40% payment has been released.
Sale registration not yet completed.
profit and gain arises on sale of capital asset.
hence agreement not yet completed...

Abhishek Kumar Gupta

Article

148 Points Joined November 2014

Yes. agree with mr abhay. it cannot be considered transfer unless possession is given. Registration of property is not relevant for the purpose of transfer. the buyer must be able to enjoy the property in a transfer.