Capital Gains – Are you Ready to Take Possession of your New Home


Capital Gains – Are you ready to Take Possession of your New Home and its imperative for Investor or Home Owner to understand his Tax obligations before he or she decides on Selling the Property.

Capital Gains Accrued in case of sale of a property are subject to either Long Term Capital Gains (LTCG) or Short Term Capital Gains (STCG). Its very important to understand and compute your capital gains before you take the possession of the New Home, else you can be then stuck for next 3 years.

We have spent the last week speaking to the Top Lawyers of Mumbai who have expertise in the Real Estate domain and their opinion is in sync with the Income Tax rules especially related to Capital Gains.

Case I – Allotment Letter Issued, Stamp Duty Done, Occupation Certificate Received and Possession Not Taken.

a. Your allotment letter was say issued in any year – let us say for example 5 Years back in 2012/3 or even at a later date.

b. You have done your Stamp Duty and Registered the Property and even may have taken the Bank Loan for example say in 2015/2016 or 2017 or even now.

c. Occupation Certificate Received or Not Received (Both Cases)

In case you want to sell the property, then please do not take possession of the property from the Developer, because as of Now you are coming under Long Term Capital Gains and you have right in property and you will get indexation benefit for the past 3/4/5 odd years, from the date of Allotment letter.

If you don’t take possession and if you are selling a Property, then its termed as Right In Property and you will be entitled for LTCG and Indexation from the date of allotment.

If you are looking to sell your property, give us the Date of Allotment, Purchase Value and we can help you compute the LTCG for you, based on the same you can take an informed decision.

Case I – Allotment Letter Issued, Stamp Duty Done, Occupation Certificate Received and Possession Taken

If you take the possession of your property, then you have to wait for another 3 years to sell from the possession date, as if you sell before that, then you are liable for Short Term Capital Gains and then you loose on the Indexation benefits from the date of allotment letter.

So, in ideal situation, if you are looking to Sell/Exit your Investment, then you should take an informed decision now.

Disclaimer : This is the opinion we have received from a Few Chartered Accountants/Lawyers who deal in Income Tax and Capital Gain matters, you are requested to kindly check with your Own CA for a final decision and recheck. The information above is just to prompt you to check before you are taking possession so that you taken an informed decision.


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