An individual enters in to agreement with developer for purchase of an apartment in 2018, and regularly pays the instalment dues to developer in 2020 when the apartment in ready for delivery he executes into tripartite sale deed by which the apartments is registered in the name of third party. This results in substantial gain for the first agreement holder which can be treated as Long term capital gain.
My question for purpose of re-investments, is he to comply with provision of section 54 or 54F.
Sale Deed Transfer Disqualifies Reinvestment Benefits; Not Considered Long-Term Capital Gain Under Section 54 of Income Tax Act An individual entered into an agreement with a developer in 2018 to purchase an apartment, making regular payments. In 2020, upon completion, a tripartite sale deed was executed, registering the apartment in a third party's name, resulting in a substantial gain for the original agreement holder. The query concerns whether this gain qualifies for reinvestment benefits under Section 54 or 54F of the Income Tax Act. The response clarifies that the date of transfer is when ownership is transferred per the sale agreement, and thus, it is not considered a long-term capital gain, disqualifying it from Section 54 benefits. (AI Summary)
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