Most non-resident Indians (NRIs) buying property in India don't go for a finished flat. Instead, they invest in a project years before its construction starts, entering into a builder-buyer agreement, making payments in instalments tied to construction milestones, and ultimately receiving possession-and a registered sale deed-much later. That gap between "when I started paying for this" and "when it was legally registered in my name" raises a genuine, high-stakes question when the property is eventually sold: which date is considered the date of purchase for computing the capital gains holding period?
Get this wrong; it could prove costly. It's the difference between long-term capital gains or LTCG (with a lower effective rate and access to reinvestment exemptions like Section 54/54EC) and short-term capital gains or STCG (taxed at slab rates, with far fewer planning options). For NRIs, already navigating repatriation, TDS, and tax treaty provisions, getting the holding period wrong can materially change the amount they ultimately receive from the sale.
