Opinion 1: If you book a flat and sell it before possesion letter, your investment is considered a capital investment. By selling after 3 years of allotment letter, you can book a long term capital gain from property. This can qualify for LTGC gains under 54 and re-investment of other properties which can make your tax liability nil. So you can go for all white transaction.
2. If you book a flat under CLP and get possesion and sell it 3 years after allotment letter is issued (or BBA registered) - same situation as above. Some rulings on sale of industrial plots and DDA flats support this.
3. Some people say - if you book and sell booking, it is ok. But if possesion letter is issued and then you sell - you have to consider possesion letter as date of acquisition. That possesion letter means it is a proper property, allotment letter is an agreement and so possesion letter changes the nature of the property. Case laws seem to be against this - but tax authorities can trouble you - you might need to go to court for this.
4. Contrary to popular perception (and my own until a few months ago) - registration is not the date for acquisition. Agreement and possesion are the main dates. But again, many tax people either out of poor knowledge or just to trouble us and extract a bribe o overlook us - might trouble us on this issue and slap a fine on us.
This is my current understanding of the issue. Might need some modification as more instances come to light
If you sell a booking 3 years after allotment letter, and reinvest - you have to get delivery of the new (one only) flat to get benefit of no LTCG. You cannot serially flip it because the money is in a special account and has to go out to one property only. If for some reason you dont get delivery, - if builder delays - you have to pay the LTCG.
If you keep selling before 3 years, you have to pay short term capital gains on each transaction.
Most people do it in black and dont bother so much.
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