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Long Term Capital Gains from sale of Residential Property – 2

by | Apr 13, 2015 | Basics, Finance, Real Estate, Taxes

No sooner that I had sent out the post on Long Term Capital Gains, I got a lot of feedback that it was not the registration date, but the date on the allotment letter that has to be considered for calculation of the Long Term Capital Gains.

I relied on a Tax Lawyer who told me to refer to Gulsan Malik vs C.I.T (check it out on google) to arrive at the conclusion that the date of agreement was the correct date.

However, there is a ruling by the Punjab and Haryana High Court that the date on the allotment letter is the right date to take into consideration. Mrs. Madhu Kaul vs Commissioner Of Income Tax on 17 January, 2014

I feel this is typical of our system where the same rule is interpreted differently by different authorities. However, after reading both the cases, I feel the reason the judge in the Gulsan Malik case disallowed the Allotment Letter date was because the letter specifically stated that there are no rights created by the issue of the allotment letter and the rights will only be created when the apartment is registered. So, in my opinion, if the allotment letter does not expressly state that “no rights are created for the buyer”, then that date would be considered.

If someone has firsthand experience of this, I would be most obliged to know the case details.

Praying hard always helps!!
The original post on LTCG is reproduced below.

Niranjan Bangera
36 Properties Pvt Ltd

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Long term capital gains from residential property – Part I – 10Apr15
If a residential property is held for 3 years and then sold and the gain from such a sale is invested in a residential property within 2 years of the sale (3 years in case of a house under construction), then the entire gain is tax free.


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Written By: niranjan

Financially Stupid Niranjan


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