Dear experts,
A controversial topic on which there i no clear answer. Expert help supported with facts/cases would be much appreciated.
- I booked a residential apt. in dec. 2004(BBA). Paid 90% of the amt. as lump sum-
- The builder promised 30 months but delayed the project for multiple reasons(land dispute with authority, financial crisis, etc) . I am getting the possession NOW in Feb. 2011. The registry is not open for this society yet.
- I want to sell the flat immediately- assume Feb 2011 as the sell date.
- I already have a residential apt. that I am living in and claim tax exemption on its bank interest.
MY questions are:-
1) Would I be taxed long term or short term on this sale. Some CA's say it could be long term (since they see booking as the real date and sight transfer of rights as the basis of this). However most CA's and net research says its short term. Which is correct.
2) Assuming its long term , should I take formal possession for this? There is a doubt that if I take possession, the right converts to asset , and then the LTCG vanishes.. Is there any basis for this? I want to take possession, because then I would be able to claim tax exemption on this house's interest as well, since it would be my second house and I can claim exemption by showing it 'deemed to rent'.
3) Assuming, its a short term gain(my bad luck!), can I add the interest paid to banks(~8lakhs) to the cost of the flat, while calculating the capital gain.
Thanks for your great help in advance!
regards
Vivek
