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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

Answer ID : 76565

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