The ITAT Delhi ruled that the holding period for long-term capital gains (LTCG) is determined from the date of full payment and transfer of possession, rather than the registration date. This reaffirms the treatment of capital assets.
LTCG Benefit Allowed Pre-Registration Ownership: ITAT Delhi
The Delhi Income Tax Appellate Tribunal (ITAT) has ruled that the holding period for long-term capital gains (LTCG) purposes commences from the date of full payment and transfer of possession under an agreement of sale, rather than the later date of registration. This clarification is crucial for accurately determining the capital gains tax liability associated with property transactions.
The tribunal emphasized that the essence of the transaction should govern tax liability, allowing taxpayers to avail themselves of LTCG benefits earlier in the process, which is particularly advantageous for real estate investors and stakeholders.
This ruling has significant implications for tax practitioners, as it can influence their clients' strategies related to property transactions and tax planning. Practitioners should advise clients on the importance of these facts to maximize their potential benefits under the LTCG provisions.
Citations
- ITAT Delhi (2026) ITA No. 456/2020
