I had paid the full amount of ₹23 lakh to the builder to buy an apartment in 2013, and had got possession the same year without getting the apartment registered in my name. I got the apartment registered only in August 2025 for ₹23 lakh—the amount which I had paid in 2013. After that, I sold the apartment for ₹30 lakh in December 2025. Since I have had possession of the apartment since 2023, does the gain of ₹7 lakh fall under long-term or short-term capital gains?
—Name withheld on request.
If you had entered into an agreement with the builder in 2013 and the registration was undertaken only in August 2025, the date of acquisition would be the date of the agreement, i.e. 2013, and not the date of registration. In fact, various high courts have held that even if the agreement was subsequently entered into, the date of the allotment letter identifying the property would be considered as the date of acquisition for the purpose of computing capital gains. Therefore, in your case, assuming that you had an agreement or an allotment letter while taking possession of the apartment in 2013, the date of acquisition would be 2013.
Since you held the apartment till December 2025, the gains arising from the sale of the agreement would be long-term capital gains, as the apartment was held for more than 24 months.
Moreover, if you are a resident individual, there may be no taxable capital gains on the sale of the apartment in your case, as per the changes to indexation introduced in Budget 2024. Indexation allows you to adjust the cost of acquisition in line with inflation, but Budget 2024 removed it for properties acquired after 23 July 2024. As you acquired the property before 23 July 2024, you have an option to pay the lower tax between these two rates: (1) 20% (plus applicable surcharge and education cess) after considering the indexation of cost, and (2) at the rate of 12.5% (plus applicable surcharge and education cess) without considering the benefit of indexation of cost.
As per the first method, the cost of acquisition of ₹23 lakh, after indexation (assuming it was acquired during fiscal year 2013-14), would be approximately ₹39.3 lakh ( ₹23,00,000*376/220). Whereas, as per the second method, you are liable to pay about ₹87,500 capital gains tax. It may be more beneficial for you to opt to be taxed at 20% after considering the benefit of indexation, in which case, there would be no tax payable on the gains.
Mahesh Nayak is a chartered accountant at CNK & Associates.
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