House we sold was in name of My Mother, Sister and Myself.We sold it at 65 Lakhs in 2017 purchased at 90000 in 1983 My Mother and Sister are ready to give consent for purchasing new property in my name. After paying all Debt 22 Lakhs remaining. Now I am purchasing new property jointly with my wife by taking loan of 40 lakhs. Will we three Mother, Sister Myself get Capital gain tax exemption. I have to pay some tax based on index. Is it valid to purchase property jointly with wife now for Capital gain tax exemption? Or it will be said that you have purchased jointly with your wife so you will get partial exemption.
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Hi
you have to calculate the capital gain tax based on the index from the year 1983.
The shares of your mother and sisters may not be vasted in you and they will be separately liable for their share of capital gain tax.
The loan amount of rupees 22 lacs has nothing to do with the capital gain tax and deduction will not be available.
The joint property can be purchased in the name of all 3 to save capital gain tax on individuals tax.
Section 54 and 54F allow an individual to invest in a new house to save on capital gains tax, the idea being to give an impetus to house construction. “Where this purpose is served and the taxpayer has invested the capital gains in the construction or purchase of a new home, the tax exemption shall be allowed
2)you are at liberty to purchased house in joint names with your wife
Yes it is valid to purchase the property jointly with your wife since Section 54 and 54F allows an individual to purchase and invest in a house in order to save the capital gain tax.
Regards
Original property is in name of my Mother, Sister and Myself. Now is it necessary to purchase new property in name of all three of us to save Capital gain tax Or if My Mother and sister give consent that I can buy property in my name .Capital gain tax can be saved for all of three. Or For saving Capital gain tax, property is to be purchased in name of all three of us Please guiDe
1)you can purchase property in name of all 3 co owners to avoid capital gains tax
In order to avoid the capital gain tax you can purchase the property on the name of all 3 co-owner
The object of granting exemption under section 54 of the Act is that a person who sells a residential house for the purpose of purchasing another convenient house must be given exemption so far as capital gains are concerned.
The A high court in a similar case before it observed that for the purposes of section 54F, the new residential house need not be purchased by the tax payer in his own name nor is it necessary that it should be purchased exclusively in his name. The High Court further observed that the assessee in the said case has not purchased the new house in the name of a stranger or somebody who is unconnected with him. The same has been purchased only in the name of his wife. The fact that the entire investment for the house has come out of the sale proceeds and that there was no contribution from the assessee’s wife is undisputed. In view of the same, the High Court allowed the exemption from long-term capital gains in favour of the tax payer.
Original property is in name of my Mother, Sister and Myself.
Now is it necessary to purchase new property in name of all three of us to save Capital gain tax
If the other share holders want to claim exemption, they may have to buy a residential property on their own or they can become joint owners of the property you propose to buy for claiming exemption, the basic objective of Section 54F of the Act is to provide impetus to house construction and so long as the purpose of house construction is achieved, such hyper technicality should not impede the way of deduction which the legislature has allowed.
if My Mother and sister give consent that I can buy property in my name .Capital gain tax can be saved for all of three.
The money derived out of the selling of the jointly held property has been utilised by the tax payer individually, then you can invest the entire amount in the new property
.