capital gains tax


 

Dear Sir

I purchased a residential apartment in Gurgaon in 2006. The builder buyer agreement specified the assigned apartment and I paid 95% of the amount upfront (took a housing loans) and since then have paid a EMI on housing loan as well. As is usual, the construction was delayed. Finally, I got the property registered in Dec 2011. Now, I would like to sell this property. My query is whether I will be eligible for LTCG? I do feel that having paid the bulk of the amount upfront, consideration could be given that I held the property for nearly six years. Would any further documentation from the builder help bolster my case?  I will be grateful to know your views and suggestions. regards, Ramesh Singh. 

 
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ADVOCATE

The property cannot be deemed to have been transferred to you in 1996, as you were not then put in possession of the property even though you paid 95% of the price.

Thefore the property can be considered to have been transferred to you within the meaning of S 2 (47) of the Income tax Act 1961, onlyon the registration in 2012.

Therefore you cannot claim that the property was held by you for more than 3 years.

 
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Dear Rajgopalan 

Grateful for the concise and clear clarification. I would just add one more query - the  builder is willing to give  a certificate of handover/possession in 2009 June. Will this be of any help? best regards, ramesh

 
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Senior Financial Advisor

Yes,in my opinion you should  be entitled for the benefits of LTCG,provided you get such letter of possession /handover in June'09.However ,better check,whether the property was ready for giving possession ,by the said  date i.e.June'2009?

 
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many many thansk for the clarification, best regards, ramesh

 
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