Hi, I have bought an under construction property. I have been paying to the builder since lasst 7 years in installments. However, now I would be selling this property without registration and of course without occupation to someone else. The property will be ready in other 6 months.
My question is:
How do I calculate the LTCG on this? As I said I have been paying to the builder since 2011-12 and the last disbursement was in 2017-18. The new buyer is required to my last 2 installments.
So I actually have both LTCG for the disbursements made before last 3 years and few short term gain for the disbursements made after the last 3 years. So should I first calculate the LTCG with indexation and then the short term capital gain. In both the cases I will have to calculate for each disbursement to the builder as the timeline is spread over.
Can you please help me verify if this is the right thing to do? Appreciate it so much.
Thank you,
Pradeep
1 Answers
Dear Pradeep,
I believe that Long Term Capital Gains (LTCG) are applicable in your case.
The right in asset is created when the builder issued an allotment letter to the assessee specifying the actual unit no of the property and any payments made before allotment is to be provided indexation from the date of allotment and any payment made after is to be provided benefit of indexation from the date the payment is made.
So, if you have any gains on sale of property then they can be treated as LTCG.
The cost of acquisition is spread over different financial years, so you can take the indexation benefit of all the payments.
You may kindly go through below articles :
Article - 1
Article - 2
Article - 3
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