LTCG on sale of 2 properties

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  1. Tushar Bramhanakr

    Tushar Bramhanakr New Member


    I am 31 year old NRI and seek guidance from CA club members on below mentioned issues.

    I had invested in two properties in India. Both properties were under construction and it took three years to build and get handover from builder. The property details are as below:


    Agreement with builder & Allotment Letter - Q4 2008

    Registration of agreement at registrar office - Jan 2011.

    Handover from builder & Possession of apartment - Q4 2012.


    It is a leased property, lease is for 999 years.

    Agreement with builder & Allotment Letter - Q3 2009

    Registration of agreement at registrar office - Jan 2011.

    Handover from builder & Possession of apartment - Q3 2014.

    While filling return last year I had shown rental income from Property1, so it is kind of declared with Tax department. With regards to Property2, I received the possession this year.

    Now I wish to sale these properties. And invest the profit in new property. I hope that I will be exempted from tax, based on assumption that three years period to be eligible for LTCG starts either from the date of allotment letter or registration of agreement. Please correct me if my assumption is wrong.

    My question is, when tax officer scrutinize my Tax Return for next year (AY 2015-2016). He will see that I was holding only Property1 and was declared in Tax Returns. Was I supposed to declare the Property2 in Tax return even before possession/handover from builder?

    If I am claiming LTCG in AY 2015-2016, will he not question that these properties were not declared in the Tax Returns for past three years?

    Note: I own only these two properties in India and have no ownership in any other property.

    Your help and guidance is much appreciated.

    Thanks in advance.

    Best Regards,

    Tushar Bramhankar
  2. Neha Sharma

    Neha Sharma Active Member

    Dear @Tushar Bramhanakr

    1. The 3 years will start from the date of agreement as the agreement gave you a right in the property.

    2. As you got the possession of the 2nd property in Q 3 of 2014, you were not required to show these in the income tax return. Moreover, as you don't have any other property in India, you can always show the 2nd property as Self-occupied property which you had kept for your residential purpose when you come to India.
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