I invested entire sale proceeds of a residential property in July 2013 on a villa under construction. The property is still not completed though the agreement to sell as well as construction agreement confirmed completion within 18 months from my agreement with developer though entire cost has been paid as early as Sep 2014 per agreements. Now I propose to claim refund of payments made with interest. ( agreement provides for only Rs20000/ per month for the delayed period). Please advise whether I can claim LTCG benefits since it is more than three years from the agreements with the builder
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Hello,
Benefit of LTGC will not be available to you since the delay has been caused because of the fault of the builder. You may please refer to the judgment of Rajneet Sandhu v. DCIT 2010 (133) TTJ 0064 (Chandigarh). The issue has been dealt in detail in the said judgement and has been answered in negative.
Regards
1.it is not clear the time of delivery of full possession of the proeprty to you.
2.If there is delay of more than one year then it is a good case for refund and damages.
3. Another option is to retain the title and seek only damages and compensation.
4. In either case you can file case beofre the consumer forum to claim damages and compensation for the delay in delivery of possession.
if a house property is sold within five years of the end of the financial year in which it was purchased. tax benefits which were claimed earlier will have to be reversed. The tax deduction claimed for the principal repayment, stamp duty and registration under Sec 80C are reversed and the amount becomes taxable in the year of sale.
In reply to comment:
That was my opinion on your issue Sir based on the facts provided by you, if your are sure and you have the copy of judgement which are in your favor then that's a great news. Go ahead and claim the benefit of LTCG.
Thanks and Regards
1. You can certainly claim refund of the amount with interest, damage and cost.
2. In the said damage claim, you can add the said damage to be incurred by you on account of non availability of exemption in calculation of LTCG tax along with your other damage claims like mental agony, rent paid for the delayed period etc.
As you have invested the entire sale proceeds in the under construction house property, even if there is a delay in completion of construction, you are eligible for the privilege.
You may get the property registered at the earliest.
