LTCG / Under construction flat / Selling before or after possession ?

[Sunil Mittal]

Hi

I booked from builder under construction flat in Aug 2006 . It will be ready for posession in Oct 2012 . I want to know the following .

1) If I sell before possession , will the gain be LTCG ?

2)  If I sell immediately after possession ( means after registry in my name ) ,  will the gain still be LTCG or I have to wait another 3 year after possession to avail LTCG ?

[sanjeev bajaj]

Dear Sunil Mittal

1. If You sell the booking of flat before possession than it will be considered as selling of rights of such flat as it is not house property. Accordingly it will be considered as LTCG as more than 3 years has been elapsed.

 

2. I f you sell after possession, whether sale deed is executed or not than it will be considered as house property then the period will be counted from the date of possession when you become the owner.

Regards

Sanjeev Bajaj

AI Summary

Selling Under-Construction Flat: Tax Implications of Long-Term Capital Gains Before vs. After Possession Explained An individual inquired about the tax implications of selling an under-construction flat before or after possession. They booked the flat in August 2006, with possession expected in October 2012. The question was whether selling before possession would qualify as Long-Term Capital Gains (LTCG) and whether selling immediately after possession would still qualify as LTCG. The response clarified that selling before possession would be considered selling rights, qualifying as LTCG since over three years have passed. However, selling after possession would be treated as selling house property, with the holding period starting from the possession date.