Yes, you can sell under construction property in India. But under construction property ko bechna mushkil hai, namunkin nhi.

Because there may be units left by the developer as well, the developer may impose some rules on reselling before possession. However, the procedure isn't as simple as it is for a ready-to-move-in apartment. Permissions, documentation, and coordination between you, the builder, the buyer, and (if applicable) your bank are all involved.

Let's grasp the fundamentals before you dive into under-construction property rules.

Can I sell a flat after the agreement?

Purchasing an apartment that is still under construction gives you the right to purchase it from the builder, but you do not yet own the actual apartment.

Therefore, the completed home itself is not transferred when you sell it, but it is only a transfer of property rights in India.

How to sell a flat before possession?

A tripartite agreement is used to complete the transfer between: 

  • You (the present buyer),

  • The new purchaser, and

  • The developer.

In this contract, the buyer agrees to pay the builder the remaining sum, and the builder agrees to transfer the property to the new buyer.

Transfer fees and other charges

A transfer fee is often charged by most builders and ranges from ₹100 to ₹500 per square foot.
Paperwork, documentation, and administrative expenses are covered.
Always check in advance because some developers might additionally add GST to this cost.
 

If you have a home loan

Before selling, you must obtain a No Objection Certificate (NOC) from the lender if your apartment is bank-financed.

Your bank will transfer the property documents straight to the new buyer's bank upon completion of the transaction (after full payment).

What about GST and stamp duty?

GST: You cannot receive a refund after selling if you have already paid GST in installments. GST on the outstanding installments will simply be continued by the next buyer.

Stamp Duty: Even if you sell before obtaining possession, stamp duty is not refundable after registration is completed.

 You can, however, factor these expenses into your selling price calculation.

Tax implications

In reality, you are selling your right to purchase the property when you sell an apartment that is still under development.

  • It is considered a short-term capital gain (taxed according to your income slab) if you sell within three years.

  • It becomes a long-term capital gain (20% tax with indexation benefits) if you sell after three years.

Expert advice: Store all of your builder receipts and evidence of payment; they will be useful for filing taxes.

Resale property process in India

  • Check your Builder-Buyer Agreement rule for any transfer or resale provisions.

  • Obtain your builder's written approval.

  • Verify all fees, including taxes, GST, transfer fees, and outstanding payments.

  • Get your bank's approval before applying for a loan.

  • Verify the correct registration of your tripartite agreement.

In summary, it's not hard to sell under construction property; all you need is a little patience, clarity, and collaboration.

You can confidently proceed to your next investment after selling your apartment with ease after all approvals are in place.