Resale understand construction builder flat - ltcg or stcg?

Long term and Short term capital gains is a subject of income tax.

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An under-construction property is still a capital asset for income tax purposes. However, for specific provisions, it should not be treated as land or building.

When the computation of capital gain is in question, one must identify whether the asset in question is a capital asset or not. Once this aspect is figured out, one should move to identify its nature, period of holding, exemption and tax rates.

When you sell the right in an under-construction property, the capital asset "right to acquire a house" is being sold in that under-construction property and not the land or building per se. This distinction is essential because the relaxation given by the Income-tax Act to compute the period of holding of land or building does not apply to the under-construction house.
 

Since the under-construction house is neither land nor a building, the period of holding is 36 months or more to qualify as a long-term capital asset. In other words, if the booking right in an under-construction house is not held at least 36 months before the sale, the resultant gains shall be taxable as a short-term capital gain.
 

Indeed, when the under-construction house qualifies as a long-term capital asset, the benefit of indexation shall be available. All the payments made to acquire the booking right of the house shall be considered as the cost of acquisition and will be indexed, taking the year of obtaining the right as a base.