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

Short-term capital gain: add-on on cancelled or quick-resold booked flat treated as taxable capital gain rather than revenue receipt.
When a purchaser's contractual right in a booked flat is surrendered or the flat is sold shortly after possession, the add-on or sale proceeds are taxable as a transfer of a capital asset and normally treated as short-term capital gain if the booking/right is a short-term capital asset; if the flat was held as trading stock, receipts will instead be business income. An alternative characterization as interest yields different tax consequences.