TaxTMI 
TaxTMI 
Computation of Capital Gain in series of EMI payment
16 Oct 2014 
2 Replies 
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Extinguishment of right to property treated as capital asset transfer; allocation and indexation rules govern instalment refunds.
The purchaser's pre-possession contractual right to the flat is a capital asset and its cancellation with refund amounts to transfer by extinguishment; the refund is the full value of consideration. Instalments paid more than three years before transfer are long term and those within three years are short term, and allocation of the refund between LT and ST components may be done pro rata or by rate of return apportionment. If holding exceeds thirty six months, indexation applies to instalments as cost (with later payments treated as cost of improvement in their payment year). (AI Summary)
The purchaser's pre-possession contractual right to the flat is a capital asset and its cancellation with refund amounts to transfer by extinguishment; the refund is the full value of consideration. Instalments paid more than three years before transfer are long term and those within three years are short term, and allocation of the refund between LT and ST components may be done pro rata or by rate of return apportionment. If holding exceeds thirty six months, indexation applies to instalments as cost (with later payments treated as cost of improvement in their payment year). (AI Summary)
The Assessee has paid to book a flat as under: A Y: 2009-10-Rs.6,00,300/- (w.e.f. 11/02/2010) A Y : 2010-2011 - ₹ 9,44,920/- A Y : 2011-12 ₹ 13,77,466/-and A Y: 2012-13 ₹ 2,80,140/-(last: 13/08/2014) - Total ₹ 32,02,826/- paid up. On cancellation on 01.07.2014 the Builder paid ₹ 43,23,398/-. Will you advise how to compoute Capital Gain?Thanks