Archive · 23 Jun 2025
Tax Implications of Selling Under-Construction Property
If you sell a flat that's still being built before you move in, it's considered a capital gain, which might be taxed.
Since rules changed, you have to hold it for over 24 months for it to be a long-term capital gain.
When you sell the right to the flat, the profit is taxed at 12.50%.
You can avoid some taxes by using the money from the sale to buy another home, according to section 54F, but you need to do this within two years.
For under-construction properties, you have three years to finish the new home.
Selling an under-construction flat involves capital gains.
The holding period for long-term capital gains is now 24 months.
Tax on profits from selling the right to a flat is taxed at 12.50%.
Exemption can be claimed under Section 54F by investing net consideration.
New residential property must be acquired within two years.
- Who
- A salaried individual selling a right to acquire a flat.
- What
- Tax implications of selling an under-construction flat.
- When
- After the budget amendment in 2024.
- Where
- N/A
- Why
- To understand the tax liabilities and potential exemptions.
Tax Calculation
N/A
Capital Gains Tax
Tax Calculation
The profits are taxed at 12.50%
N/A
N/A
Tax Exemption
Tax Calculation
Exemption can be claimed under section 54F
N/A
N/A
- Type of Sale
- Sale of right to acquire property
- Capital Gains Tax Rate
- 12.50%
- Applicable Section
- 54F
- Holding Period
- More than 24 months
- New Property Purchase Deadline
- Within two years