Long term capital gain is applicable when you keep the property for at least 3 years.

For under construction property, Does these 3 years start from the date of allotment letter or the date of Possession letter?
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  • Originally Posted by Gagan Singh
    Long term capital gain is applicable when you keep the property for at least 3 years.

    For under construction property, Does these 3 years start from the date of allotment letter or the date of Possession letter?


    the date of possession certificate issued by the developer is what counts..
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  • What is tax rate for long term capital gain in case of property?

    I know it is 20% at max, however is it minimuof these two ..??

    1) 20% with indexation benifit
    2) 10%

    Thanks..
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  • Manoja,

    I read these threads. Thanks for sharing them.

    Did you got the chance to clarify from your CA.?

    I have a flat booked under DP Scheme.
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  • Gagan Bhai, do not remember, what was i supposed to clarify :bab (38):? Please let me know the same or provide the link.

    Originally Posted by Gagan Singh
    Manoja,

    I read these threads. Thanks for sharing them.

    Did you got the chance to clarify from your CA.?

    I have a flat booked under DP Scheme.
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  • Originally Posted by MANOJa
    Gagan Bhai, do not remember, what was i supposed to clarify :bab (38):? Please let me know the same or provide the link.


    Dear Manoja, see the last post in this thread.

    https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/12616-calculation-of-long-term-capital-gains-on-property/page4?t=14953&page=4
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  • Sorry, Gagan, did not clarify with my C.A or anybody else, totally forgot about it .

    Let me see, if i can speak to somebody knowledgeable on this & probably clarify here .
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  • Originally Posted by MANOJa
    Sorry, Gagan, did not clarify with my C.A or anybody else, totally forgot about it .

    Let me see, if i can speak to somebody knowledgeable on this & probably clarify here .


    Thanks a lot. We all would wait for ur response.
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  • Reinvestment of LTCG :: Time & Calculations

    I have sold my flat & profit from it will be LTCG . I booked two Under Construction Flats ( by paying 10% amount ) 15 months before sale of my old flat . I hv paid another 40% in 12 months prior to sale of my old flat & will be paying another 30% before filing income tax return on 31st July 2012 . Now My question is will 40+30=70% will be taken as reinvestment from LTCG . I donot want to open LTCG A/c & wish to pay Tax on left over money ( Preceed from sale of old flat - ( 70% amount paid to builder } X 2 flats.

    Need Expert advise if my above calculation is correct
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  • There is a lot of confusion on this topic. I have found a document which clarifies all the rules.

    https://api.indianrealestateforum.com/api//v0/attachments/fetch-attachment?node_id=17372
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  • Go to a ca>>>>>ca>>>>>>ca>>>>>>...
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  • Add Interest Paid to Cost of Acquisition

    Almost everyone knows that interest paid on loan for under construction property is not entitled to tax relief (it can be carried forward, but that's useless these days given the loan amount).

    But

    this amount CAN be added to the cost of acquisition of the property. This is useful when you sell the property at a gain. As an icing on the cake, this amount, like purchase price, also has to be indexed (in case holding period is not less than 36 months) using the CII (Cost Inflation Index).

    This benefit can be taken for RTM properties as well. But then the benefit of tax rebate on interest paid must not be taken. So for RTM properties,

    1. if the person falls under 20 or 30% tax bracket, OR
    2. has no intention of selling,

    it makes sense for him to avail tax rebate. Otherwise adding the interest paid to cost of acquisition is more beneficial.
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  • Originally Posted by Memnon
    I have sold my flat & profit from it will be LTCG . I booked two Under Construction Flats ( by paying 10% amount ) 15 months before sale of my old flat . I hv paid another 40% in 12 months prior to sale of my old flat & will be paying another 30% before filing income tax return on 31st July 2012 . Now My question is will 40+30=70% will be taken as reinvestment from LTCG . I donot want to open LTCG A/c & wish to pay Tax on left over money ( Preceed from sale of old flat - ( 70% amount paid to builder } X 2 flats.


    Need Expert advise if my above calculation is correct


    I am in a similar situation.

    We sold off a residential plot of land which we bought decades ago in March 2014, resulting in hefty LONG TERM CAPITAL GAIN.

    We had booked an under construction apartment in late 2011. Construction/Posession is unlikely to be completed until 2017. We financed this with a loan.

    Using proceeds of the sale from the Plot of land, we opted for Pre EMI closure of the loan.

    From what I gather, to save on LTCG tax, one needs to purchase a new house between a window that spans from 1 year before sale to 2 years after sale. There also seems to be a clause to construct a new house within 3 years of sale. Which of these 2 windows applies to an under construction apartment?

    Trouble is that our date of provisional allotment (which is usually considered as the date of purchase) is more than 1 year before the sale, and possession is likely to be delayed beyond 2 years after the sale.

    We opted for pre EMI closure of the loan within a month of the sale.

    Can we save LTCG Tax?

    Just for your convenience, a timeline (again):
    October 2011 : Booked Under Construction Apartment (date of provisional allotment letter issue), financed by loan
    March 2014 : Sold Plot with hefty LTCG, opted for pre EMI closure of loan using Proceeds
    End 2017 : Expected Possession

    Different CAs have been giving different opinions and I feel this is a grey area. Moderator sahab Venkytalks says
    Despite court rulings, tax officials routinely contest and litigate on this issue to trouble people, quoting the above rule interpretation.

    To go to court, first you have to pay the tax and then go to court. That is the problem



    Also, there seems to be one IREF member called MEMNON who has been in a similar situation. MEMNONji, could you throw some light on what the treatment was like in your case? Would be immensely grateful.

    Thanks for reading & Regards
    MountainKing
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  • i am really confused. Please help me on long term capital Gain.

    May 2010 : purchased a House in Gr. Noida. Agreement of 9.5 Lacs (Loan of 8 Lacs from LIC housing)
    Spent some money in Tranfer, Registry, renovation of Property : About 1 Lacs

    Apr 2014 : Sold this house. Agreement of 27 Lacs. (Preclosure of previous loan 6 Lacs paid to LIC HOusing)

    Want to Purchase a underconstruction Multistorey Apartment. Construction to be finished in Dec 2014.

    How much should I give from MyPocket to Avoid capital Gain Tax? Rest i want to pay by taking Home Loan. Which Priced Property i need to select? Please clear.
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  • Originally Posted by investoRahul
    i am really confused. Please help me on long term capital Gain.

    May 2010 : purchased a House in Gr. Noida. Agreement of 9.5 Lacs (Loan of 8 Lacs from LIC housing)
    Spent some money in Tranfer, Registry, renovation of Property : About 1 Lacs

    Apr 2014 : Sold this house. Agreement of 27 Lacs. (Preclosure of previous loan 6 Lacs paid to LIC HOusing)

    Want to Purchase a underconstruction Multistorey Apartment. Construction to be finished in Dec 2014.

    How much should I give from MyPocket to Avoid capital Gain Tax? Rest i want to pay by taking Home Loan. Which Priced Property i need to select? Please clear.


    As per my understanding, weather you took loan on previous property or will take loan on the next property is irrelevant....

    I am giving you tentative figures, please speak to CA while filing your ITR next year as you sold in Apr 2014.....
    you bought the property in May 2010 for ~10L and sold in Apr 2014 for 27L
    Indexation applies and your property will cost ~14-15L (after indexation for 5 years 2010-2014)

    LTCG = 27-15 = 12L
    Please invest 12L in any residential property (U/C or RTM) to save LTCG tax.
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