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No GST on sale of unfinished flat to another buyer

Liquid and debt based funds are taxed at the slab rate if redeemed within 3 years. How would I pay STCG?

Dec 03, 2019, 08.12 AM IST
Dilip Lakhani
Senior Chartered Accountant

I am a student with annual income of less than Rs 2.5 lakh and investment in equity and liquid mutual funds. Even though I don't need to pay any income taxes, will I be taxed at 15 per cent for STCG and 10 per cent LTCG above Rs 1 lakhRs How do I pay these taxes? (I don't file any ITR currently.) Liquid and debt based funds are taxed at the slab rate if redeemed within 3 years. How would I pay STCG?

- Mahendra Bhattacharjee

The short-term capital gains (STCG) and long-term capital gains (LTCG) in respect of transactions of shares and mutual funds will be exempt in your case as your total income is below the basic exemption limit. In the event if your total income exceed Rs 2.5 lakh then you will be liable to pay advance tax in the quarter in which these gains arises including the tax on STCG of liquid funds, failing which will attract interest implications under the Income Tax Act. Further, you will be liable to file the return of income if your total income without giving effect of Chapter VI-A exceeds Rs 2.5 lakh.

I purchased a flat (from a builder on which I have to pay GST to the builder who is about to hand over the apartment. Once the apartment is handed over, i want to sell it to other buyer. Do i need to pay GST again? Although I am yet to receive the occupancy certificate, i plan to sell and register with another buyer.

Sai Kishore

From your question it is understood that you want to transfer a under construction property to another person before the receipt of occupancy certificate. GST is applicable on supply of goods or services made for a consideration in the course or furtherance of business. Therefore transfer of any personal asset is outside the ambit of GST. Hence, you will not be liable to pay GST on sale of the under constructed flat.

I want to give Rs 50,000 to my parents every year from my salary. Is there a way for me to claim tax deduction on this amount from my taxable income?

I understand that you will give Rs 50,000 to your parents every year by way of gift. In that case, you will not be eligible for any deduction from the taxable income. Instead of giving gift to your parents, you can avail the benefit of certain provisions under Chapter VI- A of the Act by making payments on behalf of your parents.

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(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of

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