Ltcg for property
Dear Sir,
Need your advice against following sale of old property & purchase of under construction property w.r.t. capital gain rule.
I have entered into an “agreement for sale without possession” during Dec’22 for under construction flat with builder for which physical possession is expected by April’26.
Details of payments of under construction property & sale of old property are as below:
a) Investing in under construction property with construction linked payment
• Agreement for sale without possession between builder & myself: Dec’22
• Possession / sale deed in court : April’26
• Progressive Payment terms: Dec’22 to April’26
1. 10% Nov’22 (8 Lakh)
2. 10% Feb’23 (8 Lakh)
3. 20% Apr’24 (16 Lakh)
4. 20% Apr’25 (16 Lakh)
5. 30% Oct’25 (24 Lakh)
6. 10% Apr’26 (8 Lakh)
b) I have one old property purchased in Nov’2013 which I will sell during Oct’24 (FY 2024-25) and sale proceeds will be invested for payment of last three installments 60% (₹ 48 Lakh) of above under construction property at (a) above.
• sale value of old property: ₹ 140 Lakh
• purchase value of old property : ₹ 70 Lakh
• LTCG: 70 Lakh (140-70)
c) Since duration of purchase/possession of under construction property is 18 months from sale of old property i.e. less than three years (difference between sale of old property Oct’24 and possession/sale deed of new property Apr’26) can we avail LTCG benefit u/s 54 against sale of old property for amount of ₹ 48 Lakh.
d) Since LTCG amount is ₹ 70 Lakh , balance ₹ 22 lakh (₹ 70 lakh - ₹ 48 Lakh ) will be invested in Capital Gain Bonds
e) Whether date of purchase of new property will be considered as date of possession / sale deed as Apr’26 or date of agreement for sale without possession between builder & myself as Dec’22.
Your kind support is welcomed & appreciated.
With Regards
JLGoeln