Sell Under Construction Flat in Bangalore: How a Booking Transfer Works

Plans change. A job moves to another city, the family needs a bigger home sooner, or the project you booked three years ago is running late. If you want to sell under construction flat bookings in Bangalore, it can be done, but it works quite differently from selling a finished home. You are not selling a registered property. You are selling your rights under the agreement with the builder. This guide walks through how that transfer works, what it costs, how it is taxed and when it makes more sense to wait.

How to sell under construction flat bookings in Bangalore

Until the sale deed is registered, the builder still owns the flat. What you hold is an allotment letter, an agreement for sale (and often a separate construction agreement, which is common in Bangalore), and receipts for what you have paid. Selling before possession means passing these rights to a new buyer. This is usually called an assignment or transfer of booking.

There are two common ways builders handle it:

• Assignment agreement: you (the assignor), the buyer (the assignee) and usually the builder as a confirming party sign an agreement that transfers your rights. The builder later executes the sale deed directly in the buyer's name.
• Cancellation and re-booking: the builder cancels your booking, refunds you, and issues a fresh allotment to the buyer. Your profit is then settled between you and the buyer. Many lawyers see this route as riskier for the seller, since the refund and the profit move separately.

The buyer takes over your remaining payment schedule. They pay you the amount you have already paid the builder plus your premium, and then pay the balance instalments to the builder.

Step one: read your agreement and get builder consent

Almost every builder agreement says you cannot transfer your booking without the builder's written consent. Before you list the flat or accept a token amount, check these points in your agreement for sale:

• Lock-in or minimum payment: some builders allow transfers only after a set percentage of the price is paid, or only after a certain stage of construction.
• Transfer fee: builders often charge an administrative or transfer fee. It may be a fixed amount, a per-sq-ft charge or a percentage of the flat value, and practitioner guides mention figures of roughly 1 to 3 percent in some projects. Ask for the builder's written transfer policy and the exact amount.
• Restrictions during launch phases: some projects block resale until the builder has sold most of its own inventory.

Once you have a buyer, apply to the builder for a No Objection Certificate (NOC) for the transfer. Get it in writing before the buyer pays the bulk of the money.

If you have a home loan on the booking

Most under-construction bookings are financed. In that case your bank has a tripartite agreement with you and the builder, and it holds your original documents. You cannot transfer the booking without closing that loan.

1. Get a foreclosure letter from your bank showing the exact outstanding amount.

2. The buyer, or the buyer's bank, pays off your loan directly from the sale consideration.

3. Your bank issues a loan closure letter and returns the original documents.

4. The buyer's bank signs a fresh tripartite agreement with the buyer and the builder for future disbursements.

Banks differ in what they ask for. Some want the original allottee to sign as a confirming party at registration, while others do not. Ask both banks for their checklist early, since this step often decides how long the deal takes.

Tax on selling an under-construction flat

Selling your booking rights is a transfer of a capital asset, so any profit is a capital gain. Our guide on capital gains tax covers the details; here is what is specific to bookings.

Holding period

For immovable property, the gain is long-term if you held it for more than 24 months. For an under-construction flat, the holding period is generally counted from the date of allotment, not from possession or registration, based on CBDT circulars and court rulings. This is not fully settled for every case, so confirm with a chartered accountant using your allotment letter.

Rates

• Short-term (24 months or less): the gain is added to your income and taxed at your slab rate.
• Long-term: generally 12.5% without indexation. For property acquired before 23 July 2024, resident individuals can usually choose the lower of 12.5% without indexation or 20% with indexation.

The new Income-tax Act, 2025, which took effect on 1 April 2026, has renumbered these sections but broadly kept the same rates. Whether you can claim reinvestment exemptions on gains from booking rights is a disputed area, so get professional advice before you plan around it.

TDS

If the sale consideration is ₹50 lakh or more, the buyer generally has to deduct 1% TDS and deposit it against your PAN. Make sure the buyer has your PAN and files the TDS statement correctly, so you can claim the credit.

Stamp duty, registration and GST

Stamp duty on the assignment

In Karnataka, an assignment agreement usually needs to be stamped, and often registered, at the sub-registrar's office through the Kaveri 2.0 portal. How much duty applies depends on how the document is drafted and whether possession is handed over, and lawyers and banks do not always agree on whether that duty is later adjusted against the final sale deed. Treat this as something to confirm with a Bangalore property lawyer for your specific case. Registration fees in Karnataka went up from 1% to 2% on 31 August 2025, so check the latest rates before you budget.

GST

The builder charges GST on each instalment of an under-construction flat, generally 5% for regular housing and 1% for affordable housing. The GST you have already paid forms part of your cost and is usually built into your asking price. The buyer pays GST on the remaining instalments directly to the builder.

An individual selling their own booking as a one-off is generally not seen as making a taxable supply under GST, but this is not explicitly settled for assignments. If you have sold several bookings, or you buy and sell flats as a business, speak to a tax adviser.

The RERA angle

Before you list, check the project on the RERA Karnataka website. Buyers will look at the registered completion date, quarterly progress updates and any complaints, so it helps to know what they will find. A project that is on schedule is much easier to sell than one with an extended deadline.

Because builder transfer fees and consent terms are set by your agreement, they are mainly a contractual matter. If a builder refuses consent without a reason in the agreement, or demands fees that are not mentioned anywhere, you can raise it with the builder in writing and, if needed, approach RERA Karnataka or a consumer forum. Our guide on how to check RERA Karnataka registration shows where to find the project details.

When it makes sense to sell, and when to wait

Selling before possession can work well, but it is not always the better option.

Selling early tends to make sense when

• Your plans have changed and you cannot keep paying instalments plus rent
• The project is well located and on schedule, so there is real demand for the booking
• You want to exit before a large construction-linked payment falls due

Waiting for possession tends to make sense when

• You are close to the 24-month mark from allotment and a long-term gain would be taxed lower
• The builder's transfer fee or lock-in eats up much of your profit
• Buyers in your area prefer ready flats, which is common when a project is running late
• Possession is only a few months away, since a registered, ready flat is easier to sell and to finance

Our guide on ready-to-move vs under-construction flats explains why many buyers will pay more for a finished home.

If you are thinking of selling a booking, Skyros Estates can help you understand what buyers in your micro-market are paying and check the paperwork before you sign anything. If you would rather hold, we can also help you plan a sale after possession.