Hi, We had a MHADA apartment which we purchased in year 1994. It has gone under a development in 2011 and we got possession of new flat in FEB 2018. Area of old apartment was 160 sq.ft. and new flat is 485 sq.ft. We have sold this flat in July 2019 i.e. within 2 years of possession. Are we liable for LTCG or STCG? What will be the purchase/ base value & sales value for calculating capital gain? Email: [deleted]
Yes you need to pay stcg on such gain.
Purchase value would be the price at which you would have signed the deed in 2018.
Sale value would be the value at which you have sold the property.
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Thank you
Hello,
Since you have sold the re-developed property within 2 years from the date the redevelopment was completed, the resultant gains would be taxable as short-term capital gains (STCG)
Sale value would be actual sale consideration received. Cost of Acquisition would be the sales consideration offered to tax at the time of receiving completion certificate from the competent authorities for the redeveloped property.
I hope that this answer satisfies your requirements.
Regards,
CA Hunny Badlani
For cost of acquisition, can we consider Fair Market Value given by Valuator if the value as per sales deed is very less when compared to the Fair Market Value? Value on which registration fees is paid is 15% of actual market value in 2018.
No, you cannot consider cost of acquisition higher than the value in the sale deed, since you must have mentioned the same as sales value at the time of LTCG on redevelopment property in 2018.
If such is the case why did you not show such amount as income from other sources at that time.
You can't take such benefit.
Hi,
It would be STCG.
Actual sales consideration- Purchase value at the time of possession.
No, you can't consider FMV.
- If the registration of the apartment was done in 1994 then it would be LTCG otherwise STCG. Obtain valuation report as on 01.04.2001 and index it till the date of sale i.e. 2018.
