Ramesh Singh (Consultatnt) 08 August 2012

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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4 Replies

R RAJAGOPALAN (ADVOCATE) 08 August 2012

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.

Ramesh Singh (Consultatnt) 09 August 2012

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

VIVEK NAIK (Senior Financial Advisor) 10 August 2012

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?