Capital Gain Tax Exemption on Flat Booking or Possession?

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  1. Naga

    Naga New Member

    I have a house in Bangalore bought for round 10 lacs in 2003.
    In 2011 I booked another flat in Chennai for which the possession was taken in May-2014. I have paid around 20 lacs till now as pre-EMI & down-payment.

    Now If I sell the Bangalore flat for say 35 lacs, do I have to pay any capital gain tax?

    Can the returns from Bangalore flat be considered as investment in Chennai flat and have zero capital gain tax ?
  2. gaurav_kumar

    gaurav_kumar Well-Known Member

    Capital Gains exemption is allowed if the new house is purchased max 1 year before or 2 years after the sale of the old flat.

    In your case the new flat has been purchased in 2011 and old flat will be sold in 2014.

    Therefore capital gains exemption wont be allowed.
  3. Naga

    Naga New Member

    Hi Gaurav,
    Thank a lot for the answer.

    From another query posted here, you had mentioned the date for caption gain exemption consideration is not the booking date or the possession date, but it is the registration date of the flat. So in my case capital gain exemption wont be allowed because my Chennai flat was registered in Aug-2011, though the booking was in Jan-2011 and possession was in May-2014.

    Now, considering the registration date of Chennai flat of Aug-2011, can I sell that flat and pay (get exemption) under long term capital gain ?
  4. gaurav_kumar

    gaurav_kumar Well-Known Member

    If you only paid the advance and not registered any legal document - then the actual date of registration would be considered.

    However, in case of any legal document has been registered, the date of registration of such legal document should be considered as the date of acquisition
  5. gaurav_kumar

    gaurav_kumar Well-Known Member

    As you booked the flat in 2011, you wont be able to claim capital gains exemption against this flat.
  6. Naga

    Naga New Member

    Hi Gaurav,

    I am considering to sell the Chennai flat now.

    It was booked and some advance was paid to builder in Jan-2011.
    It was registered in Aug-2011, just when the construction began.
    The builder handed over the possession in May-2014 and my bank EMIs started from May-2014.

    If I sell the flat now, will long term capital gain tax apply or the short term ?

    Appreciate any comments on this situation.

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