Dear Sir,
I have purchased a Under-Construction Residential Flat in July 2011 by paying 75% Agreement Value.
Builder issued me Letter of Allotment on the same date.
I signed Sale Agreement and paid Stamp Duty + Registration Charges + VAT + Service Tax in September 2013.
Thereby I paid Balance 25% Agreement Value in March 2014.
The Building is still under-construction and I have not taken possession from the builder.
Now in December 2015, I sold my Under-Construction Flat to Mr X.
Further, I have invested the entire proceeds of the above Sale of Flat in a another ready to occupy Flat.
Now I have 3 options for the above transaction :
1) I pay Short Terms Capital Gains Tax (As sale is before 36 months if Agreement for Sale is considered as valid).
2) I pay Long Terms Capital Gains Tax (As Sale is after 36 months if Letter of Allotment is considered as valid).
3) I claim Tax Benefit under section 54F of Income Tax (As Sale is after 36 months of Letter of Allotment + New Residential Flat is purchased from its Sale proceeds).
Please guide what is the best option available for the above Transaction.
Regards,
Vishal K,
Mumbai.