Under which head Income from sale of Flat will be taxable(in case of installment payment)

[CABIJENDERKUMAR BANSAL]

Dear All, One of my friend book a flat with omaxe. and paid Rs. 100000 as booking amount. Possession to be made after 2 year. 4 Inslalment of Rs.500000/- to be made half yearly. Now he had paid 2 instalment of Rs.500000/-. Today he need money, he want to sold this flat. Amount receivable from one vendor is Rs. 1500000 against Rs.1100000 which he paid . Whether it is capital gain or other income. This income will be taxable under which head. If answer is differ if such flat is sold after one month from the date of getting possession (All payment of instalment i.e 2100000/ has been made). Sale price of Rs. 3000000/- now Rs. 900000 is capital gain if yes then it is short term or long term. Period. Please provide valuable suggestion. Thanks Ca. B.K.BANSAL

AI Summary

Understanding Tax Impact: Selling Flats on Installment Basis and Short-Term Capital Gains Explained. A discussion on the tax implications of selling a flat booked on an installment basis. The query involves whether the income from selling the flat is considered capital gain or other income. If the flat is sold before possession, the gain is likely a short-term capital gain due to the short-term nature of the asset. If sold after possession, it still results in short-term capital gains. The response emphasizes the need for clarity in presenting facts and suggests considering the add-on amount as interest income if beneficial. The importance of accurate question framing by professionals is highlighted.