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 ?

AI Summary

Long-term capital gains treatment depends on whether sale is of pre-possession booking rights or of house property after possession.
Sale of a pre-construction booking is a transfer of rights and the period of holding is counted from the booking/assignment date; if that period exceeds the long-term threshold the gain is treated as long-term capital gains. Sale after possession and registration is treated as sale of house property and the period of holding is counted from the date of possession for determining long-term capital gains status.