Question ID :
38143
Regarding Investment in new property
An Assessee is having two residential flats and now wants to purchase one more Residential Villa which is under Construction and also Registered under RERA. Assessee is making Down payment of RS. 50 lakhs and will get possession after one and half years before which he will gift the existing one residential flat.
Whether such payment of RS. 50 lakhs will be treated as Advance or Investment
Kindly give your Valuable Suggestion.
Posted by
GOPAL KUMAR AGRAWAL
on
May 14, 2019
Filed Under
DIRECT TAXES
Date of possession of property on which date final consideration is paid is considered as date of purchase of property. All payments made before this date are considered as advance payment.
Posted by
CA. chunauti dholakia on
May 14, 2019
Answer ID :
76566
Show it as Advance paid for Flat and diclose it under Assets side of balance sheet as other long-term asset.
On the date of property registered then transfer this to the Flat account and disclose it under fixed assets.
Posted by
CA. BISHT RAKESH on
May 14, 2019
Answer ID :
76568
It will be an asset till registration
Posted by
SIVADAS CHETTOOR on
May 15, 2019
Answer ID :
76577
Assesses has purchase residential flat and therefore same should be considered as investment.
Posted by
CHINTAN SHAH on
May 16, 2019
Answer ID :
76635
It will only be an advance. It becomes investment when the full amount is paid and possession of the flat is received.
Posted by
CA. VENKITARAMAN K V on
May 25, 2019