Capital gains

Students (Querist) 19 July 2013 This query is : Resolved
If a person books a Flat in an under construction building in the year 2007 by paying Registration and Stamp Duty and gets his Flat Registered in 2007 and gets the Possession (by paying final Installment) of the Flat in 2012 and sells in the year 2012 ....Whether in the present scenario Profit on sale of Flat is Long Term Capital gains or Short Term Capital Gains.

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CA Ayush Agrawal (Expert) 20 July 2013
Date of Allotment is to be taken as date of purchase for period calculation.
payment is irrelevant.

My Person Views:- since it is a contradictary issue and apex court has given judgement by seeing fact of the case:-

If property is held for more than three years then long term capital gains apply. However the calculation of holding period does become a matter of debate in some cases.Can holding period be calculated from:•Date of singing of agreement to purchase•Date of registration or•Date of possession

Rather than go into to complexities of this topic, I can offer my own opinion which is always subject to correction. 1.Simply signing an agreement to purchase and placing a deposit, does not confirm date of transfer/acquisition of immovable property. Consider also that there are times when a property may not be ready for several years after an agreement is signed.2.Date of possession and registration dates can vary considerably.3.Possession of a flat for instance, may have been given pending registration.I would think that the date of registration would have more significance when it comes to calculation of holding period for capital gains purposes. However, in cases where registration has not been done, the date of actual possession by the purchaser could be applied for calculation of holding period.Hence, the date of registration or the date of possession of property, which ever is earlier can be used

prabhakar singh (Expert) 20 July 2013
Agree with CA Ayush Agrawal that title and possession are two species on which the cut off date for holding period can be calculated.