1) since you have held under construction flat fur more than 3 years it would attract long term capital gains

2) LTCG is exempt for an individual on sale of a residential house property, if such gains (not the whole consideration) is utilised to purchase or construct another residential house.

It should be noted that the new house should be purchased within one year before or two years after the date of transfer. In case of construction, the new house should be constructed within three years from the date of transfer.

If the sale deed has not been executed then it will be taxed as short-term capital gain as you have held the property for less than 3 years. However, if three years have expired from the date of execution of the sale deed then you can claim tax exemption on the long-term capital gain on the sale of the house. To avail of this exemption, you must use the entire profit to either buy another house within two years or construct one in three years. If you had already bought a second house within a year before selling the first one, you could still avail of the tax exemption.

If you are intending to sell the flat soon after taking possession, it is better to carry out the sale while the flat is still under construction.

The flat under-construction and the possession has not been given to you by the builder is not flat but the right to purchase the flat.

When you take possession of the flat which you have agreed to purchase, the right to purchase the flat gets converted into the flat.

Therefore, if you are selling the flat after taking possession of the flat, the period of three years starts from the date of taking possession of the flat.

The Property is regarded as a capital asset and any gains arising from the sale of property is assessed under the head ‘Capital Gains’ as per the Income Tax Act.

The capital gain should be invested in the purchase of another house either one year before or within two years from the date of transfer, or used for construction of a house within three years of the date of transfer.