Property - flat possession
In June 2013, I sold my flat in Chennai. With that money I have booked a under construction flat in Chennai City in a large gated community in July 2013. Within a month of booking the flat, I paid 85% of the flat cost i.e Entire sale amount got from old flat + additional 50 % . Since then I'm paying EMI. As per rule if I don't get the possession within 3 years from sale of the property, then I should pay 20% as capital gains tax. On this line, I requested the builder to complete my flat and give the possession by May 2016. He has obliged and agreed to complete my flat and give possession in next 2 weeks. Though work pertinent to my flat is almost over but utilites are not in place ( EB, Water, Drainage etc.,)My question here is 1) Will this suffice to get exempt from Capital Gains 2) Can I claim Housing loan exemption from next month. Getting Completion certificate from local authorities will take time.Builder will take minimum another 1 1/2 years to complete entire campus. He has planned to handover blocks in phased manner starting from next month
Asked 8 years ago in Taxation
Dear All, thanks for your input. As you have advised, I can claim exemption upon getting possession letter from Builder. Suppose at a later date if Income tax department, citing that builder has not obtained Completion Certificate from local authorities & Your block utilities are not in place - in that case what would be the implications - Will IT department impose penalty etc.,
Asked 8 years ago